Suppose the Marginal Cost of the Fourth Unit of a Public

question 136

Multiple Choice

Suppose the marginal cost of the fourth unit of a public good is $20.If Mark and Judy are the only members of society,and they are willing to pay $10 and $11,respectively,for the fourth unit of the good,then the efficient quantity is

• A) 3 units.
• B) 4 or more units.
• C) 0 units.
• D) More information is needed about the marginal benefits of the first, second, and third units of the public good.
• E) None of the above answers is correct.

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Definitions:

Merit Raises

Salary increases awarded to employees based on their job performance, often evaluated through performance appraisals.

Merit Bonuses

Financial rewards given to employees based on their performance and achievements, typically as a way to incentivize high-quality work.

Performance Appraisal System

The formal mechanism through which employee performance is assessed, feedback is provided, and development goals are set.

Gain Sharing

A performance-based compensation strategy where employees receive financial rewards based on improvements in the company's productivity or profitability.