This Graph Shows the Marginal Cost and Marginal Benefit Associated

question 80

Multiple Choice

This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope. The marginal cost of litter removal ______ due to ______.

• A)decreases; gains from specialization
• B)increases; the Coase Theorem
• C)increases; increasing opportunity costs
• D)decreases; diminishing returns to inputs

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Definitions:

Recession Risk

The likelihood of an economic downturn, characterized by a significant decline in economic activity across the economy lasting more than a few months.

Partial Certainty

This refers to a scenario in business or decision-making where there is some known information, but complete certainty about outcomes is not possible, reflecting a mix of known and unknown variables.

Expected Outcome

The anticipated result of an action, decision, or event, based on current knowledge, probabilities, and reasoning.

Utility

In economics, the satisfaction or benefit derived by consuming a product or service.