Efficiency in the Provision of a Public Good Is Achieved

question 137

Multiple Choice

Efficiency in the provision of a public good is achieved when its

• A) total social benefit equals its total social cost.
• B) average social benefit equals its average social cost.
• C) marginal social benefit equals its marginal social cost.
• D) marginal social benefit equals zero.

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Definitions:

Ginnie Mae

A government-owned corporation within the United States Department of Housing and Urban Development that guarantees principal and interest payments on mortgage-backed securities.

Mortgage Market

The market where lenders and borrowers come together to negotiate and arrange home loans, encompassing both primary and secondary market activities.

Marginal Tax Bracket

The tax rate applicable to the last unit of currency earned, influencing financial decisions by showing the additional tax cost or benefit of income changes.

Municipal Bond

A debt security issued by a state, municipality, or county to finance its capital expenditures, usually tax-exempt from federal taxes and sometimes from state taxes.