The marginal cost of providing an additional unit of the good to additional citizens is greater than zero. One more unit of a public good for some consumers means one less unit for other consumers.
Which of the following is true of the marginal cost of providing a pure public good to one more consumer quizlet?
Which of the following is true of the marginal cost of providing a pure public good to one more consumer? It is equal to zero. An industry will produce more than the socially efficient level of output under which of the following conditions? The production or consumption of a good generates a negative externality.
Which of the following explains how the government provides the optimal quantity of a public good?
Which of the following explains how the government provides the optimal quantity of a public good? it compares the marginal benefit of an added unit of the good against the government’s marginal cost of providing it.
How do you calculate negative externality?
A Negative Externality
- The market surplus at Q1 is equal to (total private benefits – total private costs), in this case, a+b+e.
- The social surplus at Q1 is equal to total social benefits – total social costs.
- The market surplus at Q2 is equal to area a+b.
- The social surplus at Q2 is equal to area a [(a+b+c) – (b+c)].
What property must a good satisfy to be a pure public good?
What property must a good satisfy to be a pure public good? It must be nonrival in consumption.
Can government policies improve upon private market outcomes?
Government policies cannot improve upon private market outcomes.
Which is true of the marginal cost of providing a pure public good?
Which of the following is true of the marginal cost of providing a pure public good to one more consumer? a) It is positive. b) It is equal to zero. c) It is equal to the original cost of the good. d) It decreases as the number of consumers increases. e) It increases as the number of consumers increases.
Which is greater marginal social benefit or marginal social cost?
In a perfectly competitive market for a good with a downward sloping demand curve and an upward sloping supply curve, the marginal social benefit is greater than the marginal social cost at the market equilibrium quantity. The government imposition of a new per-unit tax on the production of the good would
Which is an example of an increase or decrease in marginal cost?
An increase or decrease in the volume of goods produced translates to costs of goods manufactured (COGM)
Where does the optimal quantity of a public good occur?
The optimal quantity of a public good occurs where the demand ( marginal benefit ) curve intersects the supply ( marginal cost ) curve. The government uses cost-benefit analysis to decide whether to provide a particular good.
