This question has multiple answers. Select all that apply. When a good has positive externalities Group of answer choices private marginal cost is equal to social marginal cost plus external cost private marginal benefit is equal to social marginal benefit plus external benefit social marginal cost is equal to private marginal cost plus external cost social marginal benefit is equal to private marginal benefit social marginal cost is equal to private marginal cost social marginal benefit is equal to private marginal benefit plus external benefit
Added by Nabila M.
Step 1
Private marginal cost is equal to social marginal cost plus external cost: This is incorrect. When a good has positive externalities, the social marginal cost is actually less than the private marginal cost because the external benefits reduce the overall cost to Show more…
Show all steps
Your feedback will help us improve your experience
Jennifer Stoner and 91 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Marginal Utility Goods 1 and 2 are available at dollar prices of $p_{1}$ per unit of Good 1 and $p_{2}$ per unit of Good $2 .$ A utility function $U\left(x_{1}, x_{2}\right)$ is a function representing the utility or benefit of consuming $x_{j}$ units of good $j .$ The marginal utility of the $j$ th good is $\partial U / \partial x_{j}$ the rate of increase in utility per unit increase in the jth good. Prove the following law of economics: Given a budget of $L$ dollars, utility is maximized at the consumption level $(a, b)$ where the ratio of marginal utility is equal to the ratio of prices: $$\frac{\text { Marginal utility of Good } 1}{\text { Marginal utility of Good } 2}=\frac{U_{x_{1}}(a, b)}{U_{x_{2}}(a, b)}=\frac{p_{1}}{p_{2}}$$
DIFFERENTIATION IN SEVERAL VARIABLES
Lagrange Multipliers: Optimizing with a Constraint
The following table shows how the marginal benefit of a service varies for five consumers. Quantity 1 2 3 Serkan 150 125 100 Asuman 125 100 75 Bahar 100 75 50 Murat 200 150 125 Meric 600 400 200 Derive the demand curve for this service assuming that it is a public good. If the marginal cost of the good is 850, what is the efficient output of the public good? If the marginal cost of the good is 425, what is the efficient output of the public good? If the marginal cost of the good is 850, what is the efficient output assuming it is a private good?
Prashant B.
A monopolist maximizes its profit at the point where Marginal revenue equals marginal cost b) Marginal revenue equals price Marginal cost equals price (d) Marginal cost equals demand
Jennifer S.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD