Use the following to answer question:
Figure: An Individual's Marginal Benefit from a Public Good
-(Figure: An Individual's Marginal Benefit from a Public Good)Use Figure: An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good;each individual has the marginal benefit curve shown in the figure.What is the marginal social benefit from four units of the public good?
A)$0
B)$8
C)$16
D)$32

Question

Use the following to answer question:
Figure: An Individual's Marginal Benefit from a Public Good 
-(Figure: An Individual's Marginal Benefit from a Public Good)Use Figure: An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good;each individual has the marginal benefit curve shown in the figure.What is the marginal social benefit from four units of the public good?
A)$0 
B)$8 
C)$16 
D)$32

Quizplus · Accepted Answer

The marginal social benefit (MSB) of a public good is the sum of the marginal benefits (MB) that all individuals receive from an additional unit of the good. In this case, with two individuals sharing the consumption and each having the same MB curve, the MSB at four units is double the MB of one individual at that quantity. If the MB for one individual at four units is $16 (as implied by the question's context, assuming the figure shows this), then the MSB for both individuals combined is $16 x 2 = $32.

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