Use the Following to Answer Questions -(Table: Externalities from Parks)Use: Table: Externalities from Parks

question 33

Multiple Choice

Use the following to answer questions : $$\begin{array}{l}\text { Table: Externalities from Parks }\\\begin{array} { c c c } \hline \begin{array} { l } \text { Quantity of } \\\text { Land (acres) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Social } \\\text { Benefit }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Social } \\\text { Cost }\end{array} \\\hline 0 & \$ 225 & \$ 0 \\1 & 200 & 50 \\3 & 150 & 150 \\4 & 125 & 200 \\5 & 100 & 250 \\9 & 0 & 450 \\\hline\end{array}\end{array}$$
-(Table: Externalities from Parks) Use: Table: Externalities from Parks.The table shows the marginal social benefit and the marginal social cost of preserving various amounts of land in a city for a public park.Suppose that parks result in positive benefits to the community as a whole but that the marginal private benefit that any one individual in the community gets from parks is close to 0.If 5 hectares are dedicated to the park,the park is _____ from a social perspective.

• A) too large
• B) the socially optimum size
• C) too small
• D) the efficient size

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Definitions:

Legal Capital

The portion of a company's equity that cannot legally be distributed to its shareholders and must be maintained as a protective measure for creditors.

Secondary Market

The secondary market is where investors buy and sell securities they own from each other, rather than directly from the issuing company, including stock exchanges and over-the-counter markets.

Stock Exchange

A marketplace where stocks and other securities are bought and sold, facilitating the transfer of securities among investors.

Initial Public Offering

The first sale of stock by a private company to the public, typically used to raise capital for expansion.