Answer the Question on the Basis of the Following Information

question 6

Multiple Choice

Answer the question on the basis of the following information for a public good. P_a and P_b are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society. If the marginal cost of producing this good at the optimal quantity is $4, the optimal quantity must be

• A) 1 unit.
• B) 2 units.
• C) 3 units.
• D) 4 units.

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Definitions:

Insulin Secretion

The process by which the pancreas releases the hormone insulin in response to increased blood glucose levels.

Parasympathetic Stimulation

Activation of the parasympathetic nervous system, leading to responses such as decreased heart rate and increased digestive activity.

Acetylcholine Agonists

Substances that mimic the action of acetylcholine, a neurotransmitter, stimulating the acetylcholine receptor sites.

Sympathetic Stimulation

Activation of the sympathetic nervous system, which increases heart rate, blood pressure, and energy availability; often referred to as the "fight or flight" response.