If a Product Has an External Benefit,how Does Its Marginal

question 285

Multiple Choice

If a product has an external benefit,how does its marginal private benefit compare to its marginal social benefit?

• A) Marginal private benefit is less than marginal social benefit.
• B) Marginal private benefit is greater than marginal social benefit.
• C) At low quantities, marginal private benefit is less than marginal social benefit but at high quantities, marginal private benefit is greater than marginal social benefit.
• D) At low quantities, marginal private benefit is greater than marginal social benefit but at high quantities, marginal private benefit is less than marginal social benefit.
• E) Marginal private benefit cannot be compared to marginal social benefit.

---

Definitions:

Dependent Variable

A variable in statistical modeling or experimental design that is expected to change as a result of manipulations to the independent variable.

Slope

In mathematics, the slope describes the steepness, incline, or grade of a line, defined as the ratio of the vertical change to the horizontal change between two points on the line.

Intercept

The point on a graph where a line or curve crosses an axis, often used to determine where a function or equation equals zero.

Least-Squares Regression

A statistical method to determine a line of best fit by minimizing the sum of squares of the distances of data points from the proposed line.