An Efficient Level of Provision of a Public Good Is

question 71

Multiple Choice

An efficient level of provision of a public good is achieved when

• A) the cost of providing an extra unit of the good is equal to the price of the good.
• B) the cost of providing an extra unit of the good is equal to the valuation of each consumer of the extra unit.
• C) voters are satisfied that an adequate amount of the good is being produced.
• D) the cost of providing an extra unit of the good is equal to the sum of the valuations of all consumers for that unit.
• E) the valuation of each consumer for the last unit of the good produced is zero.

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Definitions:

Division

A method of mathematical operation involving the process of dividing one number by another to determine how many times the divisor fits into the dividend.

Evaluate

The process of assessing or determining the significance, worth, or condition of something, typically by careful appraisal and study.

Fraction

A mathematical expression representing the division of one quantity by another, indicating parts of a whole.

Multiplication

A mathematical operation where a number is added to itself a certain number of times, symbolized by the ‘×’ sign.