Figure 2-3 -Refer to Figure 2-3.Sergio Vignetto Raises Cattle and Llamas on Cattle

question 208

Multiple Choice

Figure 2-3

-Refer to Figure 2-3.Sergio Vignetto raises cattle and llamas on his land.His land is equally suitable for raising either animal.Which of the graphs in Figure 2-3 represent his production possibilities frontier?

• A)Graph A
• B)Graph B
• C)Graph C
• D)either Graph A or Graph C
• E)either Graph B or Graph C

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Definitions:

Marginal Social Benefit

The additional benefit received by society from the production or consumption of one more unit of a good or service.

Marginal Cost

The expense incurred from manufacturing an extra unit of a product or service.

Total Social Benefit

The total benefit to society from producing or consuming a good, including both private benefits and any external benefits.

Total Individual Benefit

The total value or satisfaction that an individual derives from consuming a particular quantity of goods or services.