Suppose That the Marginal Social Benefit from Another Unit of a Public

question 68

Multiple Choice

Suppose that the marginal social benefit from another unit of a public good is less than the marginal social cost of producing it. Then

• A) the number of free riders is at its efficient amount.
• B) less of the product should be produced because its provision exceeds the efficient level.
• C) more of the product should be produced because its provision is less than the efficient level.
• D) the principle of minimum differentiation means that production should be decreased.

---

Definitions:

Retention Ratio

A financial metric indicating the percentage of a company's net income that is not distributed as dividends but rather retained for reinvestment in the business.

Projected Sales Growth

An estimate of the rate at which a company's sales are expected to increase over a specific period.

Pro Forma Balance Sheet

A financial statement that projects the future financial position of a company, showing assets, liabilities, and equity based on hypothetical scenarios.

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a particular period.