-Refer to the Above Supply and Demand Graph for a Public

question 151

Multiple Choice

-Refer to the above supply and demand graph for a public good.Which one of the following statements is TRUE?

• A) The supply curve reflects the marginal cost and the demand curve reflects the marginal benefit of this public good.
• B) The demand curve reflects the marginal cost and the supply curve reflects the marginal benefit of this public good.
• C) There will be an overallocation of resources towards this good at output level Q₁.
• D) There will be an underallocation of resources towards this good at output level Q₃.
• E) There will be an optimal allocation of resources at output level Q_1.

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Definitions:

Second Decade

Refers to the period of time spanning from year 11 to year 20 in a century, a person's life, or any given time frame.

Neuron

A cell within the nervous system that transmits information to other nerve cells, muscle, or gland cells.

Cell Body

The part of a neuron that contains the nucleus and most of the cytoplasm and where the metabolic work of the cell is done.

Axon

A long, thin part of a neuron that transmits impulses to other neurons through small branching structures called axon terminals.