UNIT 06 / MARKET FAILURE AND THE ROLE OF GOVERNMENT

Public and Private Goods6.3 test

100 questions with explanations after each answer.

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QUESTION 01 / 100Easy

Based on the figure below, the social marginal-benefit curve is obtained by

QUESTION FIGURE

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Quantity of a shared good is on the horizontal axis and marginal benefit or marginal cost is on the vertical axis. Two individual marginal-benefit curves are shown together with their vertical sum, the social marginal-benefit curve, and an upward- sloping marginal-cost curve.

Select one answerAAveraging individual marginal benefitsBSubtracting marginal cost from each benefitCAdd individual marginal benefits at each quantityDUsing only the larger individual benefitEHorizontally summing individual quantities at each price

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Question 1