Suppose a Public Good Is Provided in an Economy with Only

question 110

Multiple Choice

Suppose a public good is provided in an economy with only two consumers,Popeye and Captain Hook.If Popeye values the public good at $4,000 per year,and Captain Hook values it at $3,000 per year,the economy's marginal benefit of the public good per year is

• A) $7,000.
• B) $4,000.
• C) $3,000.
• D) $1,000.
• E) $12,000.

---

Definitions:

Put Contracts

Financial derivatives that give the holder the right, but not the obligation, to sell a specific amount of a security at a specified price within a specified time period.

Underlying Stock

The stock that is the basis for a particular derivative instrument, such as an option.

Market Value

The current quoted price at which an asset or company can be bought or sold on the open market.

November 47.50 Call

A call option contract for the right to buy a specific financial instrument at a price of 47.50, expiring in November.