Which of the Following Is Valid for a "First-Best" World

question 32

Multiple Choice

Which of the following is valid for a "first-best" world?

• A)Social Marginal Benefit (SMB) > Price (P) = Buyer's Private Marginal Benefit (MB) = Seller's Private Marginal Cost (MC) = Social Marginal Cost (SMC)
• B)Social Marginal Cost (SMC) > Price (P) = Buyer's Private Marginal Benefit (MB) = Seller's Private Marginal Cost (MC) = Social Marginal Benefit (SMB)
• C)Price (P) = Buyer's Private Marginal Benefit (MB) = Seller's Private Marginal Cost (MC) = Social Marginal Cost (SMC) = Social Marginal Benefit (SMB)
• D)Social Marginal Benefit (SMB) > Social Marginal Cost (SMC)

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Definitions:

Physiological Basis

Refers to the underlying biological mechanisms and processes that support the functioning of living organisms.

Ghrelin

Ghrelin is a hormone produced in the stomach that stimulates appetite, leading to increased food intake and promoting fat storage.

Hunger

The physiological need for food, characterized by feelings of discomfort or weakness caused by the lack of food intake.

Intrinsic Motivation

Intrinsic motivation describes the drive to act for the sake of enjoyment, interest, or satisfaction inherent in the activity itself, rather than for some separable consequence.