-Paul and Paula Are the Only Members of Society

question 11

Multiple Choice

-Paul and Paula are the only members of society. The table above gives their marginal benefits from missile gunboats, a public good. Suppose the marginal cost of a missile gunboat is $8 million. What is the efficient quantity of missile gunboats?

• A) 3 boats
• B) 4 boats
• C) 2 boats
• D) 1 boat
• E) More information about whether the services provided by missile gunboats are rival or not is needed.

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, ultimately revealing the company's net profit or loss.

Total Revenue

The full amount of income generated by the sale of goods or services before any costs or expenses are deducted.

Net Income

The total earnings of a company or individual after deducting expenses, taxes, and deductions.

Gross Profit

The financial difference between revenue and the cost of goods sold (COGS), indicating the efficiency of a business in managing its direct costs.