The following data are for a series of increasingly extensive flood control projects: $\begin{array}{c}
\begin{array}{lll}
\
\
\text {Plan A= Levees}\
\text {Plan B = Small Reservoir}\
\text {Plan C = Medium Reservoir}\
\text {Plan D= Large Reservoir}\
\end{array}
\begin{array}{c}
\text {Total Cost}\
\underline{\text {Per Year}}\
\$ 10,000 \
24,000 \
44,000 \
72,000
\end{array}
\begin{array}{c}
\text {Total Benefit}\
\underline{\text {Per Year}}\
\$ 16,000 \
36,000\
52,000\
64,000\
\end{array}
\end{array}$
Refer to the data.For Plan D marginal costs and marginal benefits are:
A) $72,000 and $64,000 respectively.
B) $28,000 and $12,000 respectively.
C) $24,000 and $18,000 respectively.
D) $16,000 and $28,000 respectively.

Question

The following data are for a series of increasingly extensive flood control projects: $\begin{array}{c}
\begin{array}{lll}
\
\
\text {Plan  A=  Levees}\
\text {Plan B = Small Reservoir}\
\text {Plan C = Medium Reservoir}\
\text {Plan  D= Large Reservoir}\
\end{array}
\begin{array}{c}
\text {Total Cost}\
\underline{\text {Per Year}}\
\$ 10,000 \
24,000 \
44,000 \
72,000
\end{array}
\begin{array}{c}
\text {Total Benefit}\
\underline{\text {Per Year}}\
 \$ 16,000 \
36,000\
52,000\
64,000\
\end{array}
\end{array}$
 Refer to the data.For Plan D marginal costs and marginal benefits are:
A) $72,000 and $64,000 respectively.
B) $28,000 and $12,000 respectively.
C) $24,000 and $18,000 respectively.
D) $16,000 and $28,000 respectively.

Quizplus · Accepted Answer

Marginal cost for Plan D compared to Plan C is the difference in total costs per year ($72,000 - $44,000 = $28,000). Marginal benefit for Plan D compared to Plan C is the difference in total benefits per year ($64,000 - $52,000 = $12,000).

The Following Data Are for a Series of Increasingly Extensive