Suppose That an Economy Has Four People,A,B,C,and D,whose Reported Marginal

question 50

Multiple Choice

Suppose that an economy has four people,A,B,C,and D,whose reported marginal benefits from a public good are $30,$40,$50,and $60,respectively.If the marginal cost of producing the public good is $200,then the quantity of the public good should be:

• A)increased even if none of the individuals can be excluded.
• B)increased only if individual A can be excluded.
• C)decreased if none of the individuals can be excluded.
• D)decreased unless individual A or B can be excluded.

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Definitions:

Interest-Bearing Note

A debt instrument that pays interest to the holder, usually at a fixed rate, until the principal is repaid.

Face Value

The nominal or original value printed on a financial instrument, such as a bond or stock certificate.

Notes Payable

Notes payable are written agreements where a borrower agrees to pay back the principal amount along with interest to a lender at a future date.

Accrued Interest

Accrued Interest is the interest that has accumulated on a bond or loan since the last interest payment date but has not yet been paid.