Use the following to answer questions:
-(Table: Externalities from Parks) The table Externalities from Parks shows the marginal social benefit and the marginal social cost of preserving various amounts of land in a city for a public park. If 1 acre is dedicated to the park, this outcome is _____ because _____.

Question

Use the following to answer questions: 
-(Table: Externalities from Parks) The table Externalities from Parks shows the marginal social benefit and the marginal social cost of preserving various amounts of land in a city for a public park. If 1 acre is dedicated to the park, this outcome is _____ because _____.
A) efficient; MSB = MSC 
B) efficient; MSB > MSC 
C) inefficient; MSB > MSC 
D) inefficient; MSB < MSC

Quizplus · Accepted Answer

If 1 acre is dedicated to the park, the outcome is inefficient because the marginal social benefit (MSB) is greater than the marginal social cost (MSC), indicating that more land should be preserved to achieve efficiency.

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