The marginal benefit of a public good is the A. benefit of the last person's consumption....

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Question

The marginal benefit of a public good is the A. benefit of the last person's consumption....

The marginal benefit of a public good is the

A. benefit of the last person's consumption.

B.marginal benefit of the individual person who places the highest value on the good, multiplied by the number of people in the economy.

C.average of the marginal benefits of all the individuals at each quantity.

D.marginal benefit of the individual person who places the lowest value on the good, multiplied by the number of people in the economy.

E.sum of the marginal benefits of all the individuals at each quantity.

business economics

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Answer 1

Answer #1

The answer is (e) as the marginal benefit of a pubic good is the sum of total private marginal benefits for all the individuals at each quantity. Different individuals get different additional utility from increasing the quantity and these should be added to get the total marginal benefit.

All other options are incorrect as they do not give the correct formula for calculating the marginal benefit of a public good.

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Answer 2

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