The Optimal Level of Provision of Public Goods Is Where

question 34

Multiple Choice

The optimal level of provision of public goods is where societyʹs total willingness to pay per unit is equal to the

• A) total cost of producing the good.
• B) average cost of producing the good.
• C) variable cost of producing the good.
• D) marginal cost of producing the good.

---

Definitions:

Future Value

The amount of money an investment is expected to grow to over a period of time, assuming a specific interest rate.

Rates of Return

The positive or negative financial outcome of an investment over an agreed-upon period, expressed as a percent of the investment's initial outlay.

Present Value

The now value of a sum of money to be received in the future or a series of financial inflows, accounting for a specific return rate.

Simple Interest

Simple interest is a method of calculating the interest charge on a loan or investment based on the original principal amount and not on accumulated interest.