Suppose That the Government Is Trying to Decide Between Allocating

question 22

Multiple Choice

Suppose that the government is trying to decide between allocating its resources to build more dams or to build more freeways. In terms of forgone dams, as more freeways ________are constructed, the marginal benefit of additional freeways and the marginal cost of additional freeways________

• A) increases; increases
• B) decreases; decreases
• C) increases; decreases
• D) decreases; increases

---

Definitions:

Communicated

Information or ideas that have been shared or transmitted between parties, through verbal, written, or nonverbal methods.

One-Sided Promise

An agreement where only one party makes an enforceable commitment to the other without receiving a reciprocal obligation.

Breach Of Contract

A violation of a contractual obligation by failing to perform one's own promise, partially or wholly.

Quantum Meruit

A legal principle where a person can recover the reasonable value of services provided, but not contracted for.