Use the Following to Answer Questions

question 166

Multiple Choice

Use the following to answer questions :
Scenario: Ben and Nik
Ben and Nik are the only members of a community.They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known.In addition,the marginal social cost (MSC) of the public good is known and is constant.
-(Scenario: Ben and Nik) Use Scenario: Ben and Nik.At Q₂ in the figure,the marginal social benefit from the last unit of the public good is:

• A) equal to the marginal social cost.
• B) equal to P₄ + P₃.
• C) the optimal level of provision of the public good.
• D) zero for Nik.

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Definitions:

Factor

A factor refers to an element or condition that contributes to a result; in finance, it could also mean a firm that buys receivables from businesses.

Selling Expense

Costs related to the selling of products or services, including advertising, sales staff salaries, and commissions.

Interest Expense

The cost associated with an organization's debt over a given period of time.

Accounts Receivable

This represents the funds owed to a business by customers for goods or services delivered or used but not yet paid for.