This Graph Shows the Marginal Cost and Marginal Benefit Associated

question 4

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. Picking up the 20^th bag of litter would:

• A)be socially efficient.
• B)increase total economic surplus.
• C)create deadweight loss.
• D)be socially efficient, but would not be consistent the actions of self-interested individuals.

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Definitions:

Punitive

Relating to punishment, often referring to punitive damages in legal contexts, which are awarded in addition to actual damages to punish the defendant and deter future misconduct.

Public Policy

Principles and standards considered by the government to be beneficial for the community and used as a guideline for legislative or regulatory actions.

Incidental Damages

Compensation for reasonably associated losses that occur as a direct result of a breach of contract or injury.

Resale Price

The price at which an item is sold again to the public, after being purchased from the original seller.