Consider a public good, G. There are two consumers, A and B, whose 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 20 1 5 5 1 3 2 1 0 2 3 MBA 6 7 9 MC MBB 10 11 12 13 G

Consider a public good, G. There are two consumers, A and B, whose 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 20 1 5 5 1 3 2 1 0 2 3 MBA 6 7 9 MC MBB 10 11 12 13 G

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 1PA

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