The efficient use of a common resource requires that the ________ equals the ________.
A)marginal private benefit;marginal social cost
B)marginal social benefit;marginal social cost
C)marginal private benefit;marginal social benefit
D)marginal social cost;marginal private cost
E)total benefit;total cost

Question

Quizplus · Accepted Answer

The efficient use of a common resource requires that the marginal social benefit (the benefit to society as a whole) equals the marginal social cost (the cost to society as a whole). This is because a common resource is non-excludable, meaning that one person's use of it affects others. Therefore, it is important to consider the costs and benefits to society as a whole, rather than just to individuals (i.e. marginal private benefit/cost).

The Efficient Use of a Common Resource Requires That the ________