Use the following to answer question:
-(Table: Security in a Residential Community)Use Table: Security in a Residential Community.Suppose that the residential community has 100 residents.The marginal cost of hiring the fourth security guard is _____,and the marginal social benefit is _____.
A)$150;$200
B)$150;$100
C)$150;$600
D)$600;$1,900

Question

Use the following to answer question: 
-(Table: Security in a Residential Community)Use Table: Security in a Residential Community.Suppose that the residential community has 100 residents.The marginal cost of hiring the fourth security guard is _____,and the marginal social benefit is _____.
A)$150;$200 
B)$150;$100 
C)$150;$600 
D)$600;$1,900

Quizplus · Accepted Answer

From the table, we can see that the fourth security guard provides a marginal social benefit of $100. At the same time, the marginal cost of hiring the fourth security guard is $150. Thus, hiring the fourth security guard would result in a net loss of $50 ($100 - $150). Therefore, it is not the best choice. The best choice would be to hire only the first three security guards since they provide a net marginal benefit.

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