The Optimal Output of a Public Good Occurs Where

question 27

Multiple Choice

The optimal output of a public good occurs where

• A)The total cost of the good equals the cumulated benefits of all consumers
• B)The sum of the marginal benefit of each consumer at a given output equals the marginal cost of the good
• C)The marginal benefit of the consumer who values the good most should equal the marginal cost of the good
• D)The horizontal sum of the consumer benefits of the good should equal the marginal cost of producing the good

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Definitions:

Trade

The exchange of goods and services between parties, which can be within or across national borders.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually do pay.

Trade

The process of purchasing, vending, or trading products and services among individuals, corporations, or nations.

Trade

The exchange of goods, services, or both within and between countries.