A government is considering undertaking a construction project of an increasing scale (ranging from 1, 2, 3, to 4). The estimated marginal costs and marginal benefits of each successive scale of the project are given in the table below. What is the total cost and total benefit of the scale-3 project?

Question

A government is considering undertaking a construction project of an increasing scale (ranging from 1, 2, 3, to 4). The estimated marginal costs and marginal benefits of each successive scale of the project are given in the table below.  What is the total cost and total benefit of the scale-3 project?

Quizplus · Accepted Answer

To find the total cost and total benefit of the scale-3 project, we need to add up the marginal costs and marginal benefits of all the projects up to scale 3.
Total Cost = $6 million (scale-1) + $13 million (scale-2) + $18 million (scale-3) = $37 million
Total Benefit = $7 million (scale-1) + $15 million (scale-2) + $19 million (scale-3) = $41 million
Therefore, the best choice is C, as it gives us the total cost and benefit of the scale-3 project.

A Government Is Considering Undertaking a Construction Project of an Increasing