This graph shows the marginal costs and marginal benefits associated with roadside litter clean up.Assume that the marginal cost and marginal benefit curves slope in the usual directions.
Refer to the information given above.Suppose the state highway department has picked up 15 bags of litter.Protesters have staged a demonstration demanding that the highway department return to pick up the remaining litter.From an economic efficiency perspective,the protesters have a ________ claim because ________.
A) legitimate;litter generates a negative externality
B) faulty;the additional resources needed to remove more litter could be better used elsewhere
C) faulty;the government is not responsible for taking care of private property
D) legitimate;the government has a responsibility to take action when private market incentives do not yield the socially optimal result

Question

This graph shows the marginal costs and marginal benefits associated with roadside litter clean up.Assume that the marginal cost and marginal benefit curves slope in the usual directions. 
Refer to the information given above.Suppose the state highway department has picked up 15 bags of litter.Protesters have staged a demonstration demanding that the highway department return to pick up the remaining litter.From an economic efficiency perspective,the protesters have a ________ claim because ________.
A) legitimate;litter generates a negative externality 
B) faulty;the additional resources needed to remove more litter could be better used elsewhere 
C) faulty;the government is not responsible for taking care of private property 
D) legitimate;the government has a responsibility to take action when private market incentives do not yield the socially optimal result

Quizplus · Accepted Answer

The socially optimal clean-up level is 15 bags;any more than that has higher opportunity costs than benefits.

This Graph Shows the Marginal Costs and Marginal Benefits Associated