Table 11
Table $1.1$ Sergio Tutors Fellow Students For $\$ 10$

question 178

Multiple Choice

Table 1.1
Table $1.1$
$\begin{array}{|l|l|}\hline \text { Hours } & \text { Revenue } \\\hline 1 & \$ 10 \\\hline 2 & \$ 20 \\\hline 3 & \$ 30 \\\hline 4 & \$ 40 \\\hline 5 & \$ 50 \\\hline\end{array}$
Sergio tutors fellow students for $\$ 10$ an hour.
-Refer to Table 1.1. Sergio hires an assistant for $5 per hour. What is his marginal cost if he tutors 1 hour a week and also pays his assistant?

• A) $25
• B) $20
• C) $15
• D) $10
• E) $5

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Definitions:

Subsidize

Financial support extended by a government or organization to lower the production costs or price of goods and services, making them more accessible to the public.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction, which are not reflected in the transaction's price.

Taxed

The act of imposing financial charges on individuals or entities by a governmental organization in order to fund public spending.

Coase Theorem

A principle that suggests that if property rights are well-defined and transaction costs are negligible, parties will negotiate to correct externalities without the need for government intervention.