Refer to Scenario 16

question 65

Multiple Choice

Refer to Scenario 16.2 below to answer the question(s) that follow.
SCENARIO 16.2: The marginal benefit for a particular food is described by MB = 60 - q, where q refers to the quantity of the food. The marginal cost of producing the food is described by MC = 3q. There is a negative externality associated with food production and the marginal social cost of food production is MSC = 5q.
-Refer to Scenario 16.2. The efficient output level is ________ and the efficient price is ________.

• A) 10 units of food; $20
• B) 10 units of food; $50
• C) 0 units of food; $0
• D) 20 units of food; $40

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Definitions:

Bailment

A legal relationship where physical possession of personal property is transferred from one person to another, with the understanding that the property will be returned.

Disclaimer of Liability

A statement that specifies or limits the extent to which a party can be held responsible for any damages or losses incurred.

Proprietor

An individual who owns and operates a business, holding sole responsibility and authority over its operations.

Notice

Formal communication or warning given in a prescribed manner by one party to another regarding actions, rights, or obligations.