If expanding an activity leads to greater MSB than MSC,social well-being is increased by the expansion.

Question

Quizplus · Accepted Answer

This is because MSB (Marginal Social Benefit) measures the benefit received by society from an additional unit of an activity, while MSC (Marginal Social Cost) measures the cost incurred by society from producing an additional unit of the same activity. If MSB exceeds MSC, it implies that the benefit to society is greater than the cost, and hence expanding the activity would lead to an increase in social well-being.

If Expanding an Activity Leads to Greater MSB Than MSC,social