Consider a public good, G. There are two consumers, A and B, wnose marginalbenefit curves are shown below. In the same diagram, the marginal cost curvefor G is also shown. Based on the diagram, the Pareto optimal level of G isunits.121110987654321125MBA6 7MBB98MC10111213 G

The public good have non exclusivity and non rivalrous features. Hence if one person takes its…

a public good, are two consumers, A B, who margina benefit curves are shown below. In the same diagram, the marginal cost curv for G is also shown. Based on the diagram, the Pareto optimal level of G is units. 12 11 10 9 1 1 2 3 5 MBA 7 6 8 MBB 9 MC 10 11 12 13 G

a public good, are two consumers, A B, who margina benefit curves are shown below. In the same diagram, the marginal cost curv for G is also shown. Based on the diagram, the Pareto optimal level of G is units. 12 11 10 9 1 1 2 3 5 MBA 7 6 8 MBB 9 MC 10 11 12 13 G

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter5: Difficult Cases For The Market And The Role Of Government

Section: Chapter Questions

Problem 5CQ

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Question

Consider a public good, G. There are two consumers, A and B, wnose marginal
benefit curves are shown below. In the same diagram, the marginal cost curve
for G is also shown. Based on the diagram, the Pareto optimal level of G is
units.
12
11
10
9
8
7
6
5
4
3
2
1
1
2
5
MBA
6 7
MBB
9
8
MC
10
11
12
13 G

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