Consider an Economy with Three Consumers, Each with a Marginal

question 9

Multiple Choice

Consider an economy with three consumers, each with a marginal benefit for a public good of MB = 10 - q.If the marginal cost of providing the good is $0 per unit, what is the DWL arising in the market outcome?

• A)DWL = $150
• B)DWL = $75
• C)DWL = $50
• D)DWL = $300
• E)DWL = $200

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Definitions:

Variability

The extent to which data points in a set differ from each other and from the mean of the set; a measure of dispersion or volatility.

Standard Deviation

A measure of the dispersion or variability of a set of data points around the mean, commonly used in finance to represent the volatility or risk associated with a particular investment.

Expected Return

A measure of the average likely profit or loss on an investment considering past performance or future forecasts.

Beta

A measure of a stock's volatility in relation to the overall market; a higher beta means higher risk but potentially higher returns.