Suppose a Good Has an External Benefit and No External

question 233

Multiple Choice

Suppose a good has an external benefit and no external cost. When a competitive, unregulated market is at its equilibrium, then the

• A) marginal private benefit is less than the marginal social benefit.
• B) marginal private benefit is greater than the marginal social benefit.
• C) marginal private cost is less than the marginal social cost.
• D) marginal private cost is greater than the marginal social cost.

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Definitions:

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A Filipino revolutionary, politician, and military leader who played a key role in the Philippine struggle for independence from Spain and later against the United States.

Leonard Wood

A United States Army officer who served as the Chief of Staff of the Army, Military Governor of Cuba, and Governor General of the Philippines in the early 20th century.

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