Assume That a Government Is Considering a New Social Program

question 60

Multiple Choice

Assume that a government is considering a new social program and may choose to include in this program one of four progressively larger projects. The marginal cost and the marginal bene?ts of each of the four
Projects are given in the table below.
$$\begin{array} { | c | c | c | } \hline \text { Project } & \text { Marginal Cost } & \text { Marginal Benefit } \\\hline A & \$ 1 \text { Billion } & \$ 2 \text { Billion } \\\hline B & 2 \text { Billion } & 3 \text { Billion } \\\hline C & 5 \text { Billion } & 7 \text { Billion } \\\hline D & 7 \text { Billion } & 8 \text { Billion } \\\hline\end{array}$$ Which project should the government select to achieve the maximum net bene?t?

• A) A
• B) B
• C) C
• D) D

---

Definitions:

Mexico City

The capital and largest city of Mexico, known for its rich history, culture, and significant influence in Latin America.

Abraham Lincoln

The 16th President of the United States, who led the country during the Civil War and issued the Emancipation Proclamation.

War With Mexico

Refers to the Mexican-American War (1846-1848), a conflict between the United States and Mexico, leading to the U.S. acquisition of territories in what is now the southwest United States.

Pre-war Mexican Land

Territories that were part of Mexico before wars, particularly the Mexican-American War, after which significant land was ceded to the United States.