Suppose That at Current Consumption Levels, the Marginal Social Cost

question 57

Multiple Choice

Suppose that at current consumption levels, the marginal social cost of using the Los Angeles freeway system is $25 while the marginal social benefit is $15. In this instance, government officials should:

• A) take actions to decrease use of the freeway system.
• B) take actions to increase use of the freeway system.
• C) take no actions to change use of the freeway system.
• D) build more freeways.

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Definitions:

Social Environment

The immediate physical and social setting in which people live or in which something happens or develops, including the cultural, economic, political, and social conditions that influence people's lives.

Information Processing Theory

A theory in psychology that likens the human mind to a computer, focusing on how people process stimuli that they encounter, including how they attend to, perceive, remember, and retrieve information.

Piaget

A Swiss psychologist famed for his theories of cognitive development in children, identifying stages of mental growth from infancy to adolescence.

Longitudinal Research Design

A research methodology that studies the same subjects over a period of time, potentially revealing development or changes.