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Question 150

Multiple Choice

Use the following to answer questions :
Scenario: Ben and Nik
Ben and Nik are the only members of a community.They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known.In addition,the marginal social cost (MSC) of the public good is known and is constant. Use the following to answer questions : Scenario: Ben and Nik Ben and Nik are the only members of a community.They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known.In addition,the marginal social cost (MSC) of the public good is known and is constant.   -(Scenario: Ben and Nik) Use Scenario: Ben and Nik.In the figure,Q<sub>4</sub>: A)  is the socially optimal level of provision of the public good. B)  is equal to P<sub>4</sub> + P<sub>3</sub> in marginal social benefits. C)  represents an amount at which the MSB is greater than the MSC. D)  will not be produced since neither Ben nor Nik finds any benefit in it at this level.
-(Scenario: Ben and Nik) Use Scenario: Ben and Nik.In the figure,Q4:


A) is the socially optimal level of provision of the public good.
B) is equal to P4 + P3 in marginal social benefits.
C) represents an amount at which the MSB is greater than the MSC.
D) will not be produced since neither Ben nor Nik finds any benefit in it at this level.

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