Alex, Kara, and Susie Are the Only Three People in a Community

question 136

Multiple Choice

Alex, Kara, and Susie are the only three people in a community. Alex is willing to pay $40 for the third unit of a public good; Kara is willing to pay $25. If the marginal cost of producing the third unit is $100, what is the minimum amount that Susie must be willing to pay for it to be efficient for government to produce the third unit?pay for it to be efficient for government to produce the third unit?

• A) $35
• B) $100
• C) $65
• D) The amount cannot be determined with the information provided.

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Definitions:

Prepackaged Ideas

Notions or concepts that are offered in a ready-made form, often reflecting prevailing societal norms or ideologies without critical examination.

Critical Theory

A theoretical framework that critiques society and culture by revealing and challenging power structures.

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The fundamental characteristics and underlying social norms, values, and structures that define a society.

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