Asked by
Vicky Trillo
on Dec 04, 2024
Verified
The difference between the marginal social cost and the private cost of a common property resource represents:
A) the social discount rate.
B) a deadweight loss.
C) is generally negative because the people who use the resources assign higher value to them than other members of society.
D) the opportunity cost of reducing the resource by one unit for other members of society.
Marginal Social Cost
The total cost to society of producing one additional unit of a good or service.
Private Cost
The costs that an individual or company incurs directly as a result of its actions, excluding external costs borne by society.
Deadweight Loss
Net loss of total (consumer plus producer) surplus.
- Explain the difference between marginal social cost and private cost in the context of common property resources.
Verified Answer
MC
Learning Objectives
- Explain the difference between marginal social cost and private cost in the context of common property resources.