The efficient quantity of a public good occurs when the marginal cost of providing that good equals the sum of the marginal benefits to all individuals
What will be an ideal response?
True. The demand for the public good is found by vertically summing so that we have the sum of the marginal benefits at each quantity.
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The demand for tobacco is price inelastic. Suppose there is a drought that destroys a large portion of the tobacco crop
What will happen in the market for tobacco? Will the equilibrium price and quantity change? If so, how? What will happen to the total revenue earned by tobacco farmers?
What are the main differences between the linear stages and international dependency models of development?
What will be an ideal response?
Which of the following is not included when using the expenditure approach to compute GDP?
a. Consumer spending on goods and services b. Net exports c. Government purchases d. Private investment e. Transfer payments
Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
a. an increase in the supply of electric cars so that the supply curve shifts rightward. b. an increase in the supply of electric cars so that the supply curve shifts leftward. c. a decrease in the supply of electric cars so that the supply curve shifts rightward. d. a decrease in the supply of electric cars so that the supply curve shifts leftward.