Figure 10-19
-Refer to Figure 10-19. Note that the lines labeled "Demand" and "Social Value"are parallel. Also, the slopes of the lines on the graph reflect the following facts: (1) Private value and social value decrease by $1.00 with each additional unit of the good that is consumed, and (2) private cost increases by $1.40 with each additional unit of the good that is produced. Thus, when the 74th unit of the good is produced and consumed, social well-being
A)decreases by $2.40.
B)decreases by $1.60.
C)increases by $1.00.
D)increases by $1.40.

Question

Figure 10-19 
-Refer to Figure 10-19. Note that the lines labeled "Demand" and "Social Value"are parallel. Also, the slopes of the lines on the graph reflect the following facts: (1) Private value and social value decrease by $1.00 with each additional unit of the good that is consumed, and (2) private cost increases by $1.40 with each additional unit of the good that is produced. Thus, when the 74th unit of the good is produced and consumed, social well-being
A)decreases by $2.40. 
B)decreases by $1.60. 
C)increases by $1.00. 
D)increases by $1.40.

Quizplus · Accepted Answer

Social value decreases by $1.00 with each additional unit of the good that is consumed, and private cost increases by $1.40 with each additional unit of the good that is produced. Thus, when the 74th unit of the good is produced and consumed, social well-being decreases by $2.40 ($1.00 + $1.40).

Figure 10-19 -Refer to Figure 10-19. Note That the Lines Labeled "Demand