A Benevolent Social Planner Would Prefer That the Output of Good

question 539

Multiple Choice

A benevolent social planner would prefer that the output of good x be increased from its current level if, at the current level of output of good x,

• A)social value = private value = private cost < social cost.
• B)social cost > private value = social value > private cost.
• C)social cost = private cost = private value < social value.
• D)social value = private cost = social cost > private value.

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Definitions:

Future Value

The worth of a current asset on a future date, calculated by estimating its growth rate over a specific period.

Compound Interest

Interest on both the initial principal and the accumulated interest from previous periods on a deposit or loan.

Future Value

The worth of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.

Compounded Quarterly

Referring to interest that is calculated and added to the principal amount at the end of each quarter, leading to exponential growth.