Assume That a Government Is Considering a New Social Program

Multiple Choice

Assume that a government is considering a new social program and may choose to include in this program one of four progressively larger projects. The marginal cost and the marginal bene?ts of each of the four
Projects are given in the table below.
$$\begin{array} { | c | c | c | } \hline \text { Project } & \text { Marginal Cost } & \text { Marginal Benefit } \\\hline A & \$ 1 \text { Billion } & \$ 2 \text { Billion } \\\hline B & 2 \text { Billion } & 3 \text { Billion } \\\hline C & 5 \text { Billion } & 7 \text { Billion } \\\hline D & 7 \text { Billion } & 8 \text { Billion } \\\hline\end{array}$$ Suppose that the government chooses to do project C. What is the total cost and total bene?t of doing project
C?

A) Total cost is $5 billion, and total bene?t is $7 billion.
B) Total cost is $4 billion, and total bene?t is $7 billion.
C) Total cost is $8 billion, and total bene?t is $12 billion.
D) Total cost is $15 billion, and total bene?t is $20 billion.