Use the Following to Answer Questions

question 13

Multiple Choice

Use the following to answer questions:
Scenario: Private and External Benefits
A small community finds that tidy lawns and neighborhoods provide both private and external benefits. They determine that the marginal private benefit (MPB) of lawns can be represented by the equation MPB = 50 - 0.5Q, where Q is the number of hours spent on keeping lawns tidy. The marginal private cost (MPC) of such lawn upkeep is represented by the equation MPC = 0.5Q, where Q is again the number of hours engaged in lawn upkeep.
-(Scenario: Private and External Benefits) Look at the scenario Private and External Benefits. The community estimates the marginal social benefit from lawn upkeep to be $15. Given this information, what is the socially optimal amount of lawn upkeep for this community?

• A) 0 hours
• B) 45 hours
• C) 50 hours
• D) 65 hours

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Definitions:

Labour

The human effort, whether physical or mental, contributed towards the production of goods or services in an economy.

Capital

Financial assets or resources that individuals or organizations use to fund their operations and invest in their businesses.

New Technology

The latest advancements or innovations in technology that offer improved solutions or efficiency.