The Following Questions Refer to the graph below.
-A movement from point g to point e in 2012 is optimal only if

Question

The Following Questions Refer to the graph below. 
-A movement from point g to point e in 2012 is optimal only if

Quizplus · Accepted Answer

Movement from point g to e would only be optimal if the marginal social cost (MSC) is less than the marginal social benefit (MSB). This can be observed from the fact that at point e the MSB curve intersects the MSC curve, indicating that the benefits from producing education are greater than the costs, whereas at point g the MSC curve is above the MSB curve, indicating that the costs of producing food exceed the benefits. Therefore, it would not be optimal to move from g to e if the opposite were true (i.e. the MSC > MSB). Option E (point c is not an option) is irrelevant to this question. Option A and B are not supported by the graph as it does not provide any information about the preferences of people in Sharpland.

The Following Questions Refer to the Graph Below