To Determine the Efficient Quantity of a Public Good to Supply

question 17

Multiple Choice

To determine the efficient quantity of a public good to supply,

• A) the private firms that will produce the good each produce the exact same quantity.
• B) politicians use the principle of maximum differentiation.
• C) total benefit is equated to total cost, the same as is done to determine the efficient quantity of a private good.
• D) marginal benefit and marginal cost are equated, the same as is done to determine the efficient quantity of a private good.
• E) marginal benefit must exceed marginal cost by as much as possible.

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Definitions:

Equity Theory

A theory that focuses on determining whether the distribution of resources is fair to both relational partners.

Hourly Basis

A method of compensation where individuals are paid for each hour of work performed, commonly used for part-time or temporary jobs.

Goal Commitment

The degree of determination and attachment an individual has towards achieving their set objectives.

Specific And Challenging Performance Goal

A well-defined objective that is both ambitious and requires significant effort to achieve, used to motivate and improve performance.