To achieve the efficient amount of use of a common resource, the use should be such that ________ equals ________.
A) marginal private benefit; marginal cost
B) marginal cost; marginal benefit
C) marginal social cost; marginal social benefit
D) marginal social cost; marginal private cost
E) marginal social benefit; marginal private cost

Question

Quizplus · Accepted Answer

The efficient allocation of a common resource occurs when the marginal social cost (the cost imposed on society as a whole) equals the marginal social benefit (the benefit received by society as a whole). This ensures that resources are allocated in a way that maximizes overall welfare. Choices A, B, D, and E do not reflect the societal costs and benefits of resource use and therefore do not provide an optimal allocation of resources.

To Achieve the Efficient Amount of Use of a Common