________ demonstrates that an optimal (or most efficient) level of output exists for every public good.
A) The Tiebout hypothesis
B) Samuelson's theory of public expenditure
C) The Theory of Public Choice
D) The Coase theorem

Question

Quizplus · Accepted Answer

Samuelson's theory of public expenditure posits that for public goods, an optimal level of provision exists where the sum of individuals' marginal rates of substitution between the public good and a private good equals the marginal rate of transformation. This theory demonstrates how to achieve an efficient allocation of resources for public goods.

________ Demonstrates That an Optimal (Or Most Efficient) Level of Output