Pam and Kunal Are the Only Members of a Community

question 10

Multiple Choice

Pam and Kunal are the only members of a community that is trying to determine how much of the public good should be produced.Suppose that Pam is willing to pay $10 for the fourth unit of the public good and that Kunal is willing to pay $6 for the fourth unit.The marginal cost of producing the public good is constant at $4.Which of the following is TRUE?

• A) Fewer than four units of the public good should be produced.
• B) More than four units of the public good should be produced.
• C) Exactly four units of the public good should be produced.
• D) The Lindahl equilibrium is established when the price of the public good is $10.

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Definitions:

Prime Farmland

Land that is highly suitable for agriculture due to its fertility and ability to sustain long-term crop production.

Urban Sprawl

The uncontrolled expansion of urban areas into the surrounding countryside, often characterized by low-density residential and commercial development.

Urban Open Space

Areas in urban environments reserved for parks, green spaces, and recreational activities, contributing to environmental and public health.