In a Lindahl Equilibrium

question 10

Multiple Choice

In a Lindahl equilibrium,

• A)each consumer purchases a pure public good up to the point at which his or her marginal bene?fit equals the marginal social cost of the good.
• B)each person pays a tax per unit of the pure public good equal to his or her marginal benefit.
• C)the sum of the marginal benefits of all consumers equals the marginal social cost of the good.
• D)Both (b) and (c) are correct.

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Definitions:

Deontology

An ethical theory based on the belief that actions are morally required, permitted, or forbidden based on a set of rules.

Virtue Ethics

A philosophical approach that emphasizes the role of character and virtue in moral philosophy rather than either the consequences of actions or the rules governing them.

Business Ethics

moral principles and standards that guide behavior in the world of commerce, influencing company policies and practices.

Profit Motive

The intent to engage in activities or transactions for the purpose of earning financial gain or profit.