Use the following for questions 55-59.
Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit

-(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit) In Panel (b), if activity is restricted to activity level E, the net benefit will be shown by the area:
A) ABGF.
B) ABCD.
C) AEFG.
D) ABC.

Question

Use the following for questions 55-59.
Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit
 
-(Exhibit: Marginal Benefit, Marginal Cost, and Net Benefit) In Panel (b), if activity is restricted to activity level E, the net benefit will be shown by the area:
A) ABGF. 
B) ABCD. 
C) AEFG. 
D) ABC.

Quizplus · Accepted Answer

The net benefit is the difference between the marginal benefit and the marginal cost. At activity level E, the marginal benefit is AB and the marginal cost is EF. The net benefit is therefore the area ABGF.

Use the Following for Questions 55-59