1. The marginal private benefit for good X is 100-4X. 2. The marginal external b

Question

1. The marginal private benefit for good X is 100-4X. 2. The marginal external benefit of good X is 1X 3. The marginal private cost of good X is 2X. 6. The profit-maximizing output of widgets is a. 5.25 b. 10.5 c. 16.67 d. 20 The socially efficient output of X is a. 5 units b. 10 C. 15 d. 20 The marginal private cost of the 4th unit is b. 6 C. 8 d. 10 The marginal social cost of the 4h unit is b. 6 C. d. 12 10. The marginal social benefit from consuming the 5h unit is a. $10 b. 12 ?. 85 d. 18 11 The subsidy required to reach a socially efficient level of production is a. $20 b. 30 ?. 40 d. 50

Explanation / Answer

Answer

6) The correct option is c) 16.67

Profit Maximizing output is when Marginal Private Benefit = Marginal social cost

=> 100 - 4X = 2X

=> X = 100/6 = 50/3 = 16.67

7)

The correct answer is d) 20

Social Efficient Output is that level of output when Marginal Social Benefit = Marginal Social Cost

Marginal Social Menefit = Marginal Private Benefit + Marginal External Benefit

In this Case Marginal Social Cost = Marginal Private Cost

Hence

= 100 - 4X + 1X = 2X

=> 100 = 5X

=> X = 20

8)

The correct option is c) 8

Marginal Private cost = 2X

Here X = 4

Hence Marginal Private Cost of 4th unit = 2*4 = $8

9) The correct option is c) 8

In this case Marginal Social Cost = Marginal Private Cost

Hence Marginal Social cost of 4th Unit = 2*4 = $8

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.