When determining the number of public goods to produce, government must analyze the Marginal Social Benefit (MSB) and Marginal Social Cost (MSC) of each good so they can carefully choose the optimal number of goods to produce in order to Maximize the benefit to society. Answer the questions below about MSB and MSC. Then use the table below the questions to find the number of parks that the government should produce based on the information provided. You will need to complete the table to answer the questions. For questions 4-6 remember to use The Rational Rule to determine the answer to "how many" parks. 2. Define MSB 3. Define MSC 4. How many public parks will be built in this town? 5. If the MSC of each public park decrease to $300, what will be the change in the number of public parks built in this town be? 6. Now assume the social benefit gained with each public park is cut in half. As a social cost of $300 per park, how many public parks will be built in this town? Explain. Total Social Quantity Total Social Cost MSB MSC Benefit

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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When determining the number of public goods to produce, government must analyze the Marginal
Social Benefit (MSB) and Marginal Social Cost (MSC) of each good so they can carefully choose the
optimal number of goods to produce in order to Maximize the benefit to society.
Answer the questions below about MSB and MSC.
Then use the table below the questions to find the number of parks that the government should
produce based on the information provided. You will need to complete the table to answer the
questions. For questions 4-6 remember to use The Rational Rule to determine the answer to "how
many" parks.
2. Define MSB
3. Define MSC
4. How many public parks will be built in this town?
5. If the MSC of each public park decrease to $300, what will be the change in the number of public
parks built in this town be?
6. Now assume the social benefit gained with each public park is cut in half. As a social cost of $300 per
park, how many public parks will be built in this town? Explain.
Total Social
Quantity
Total Social Cost
MSB
MSC
Benefit
1
1,400
500
2,500
1,000
3,400
1,500
4
4,100
2,000
4,600
4,900
5
2,500
3,000
3,500
6
7
5,000
8
5,000
4,000
Transcribed Image Text:When determining the number of public goods to produce, government must analyze the Marginal Social Benefit (MSB) and Marginal Social Cost (MSC) of each good so they can carefully choose the optimal number of goods to produce in order to Maximize the benefit to society. Answer the questions below about MSB and MSC. Then use the table below the questions to find the number of parks that the government should produce based on the information provided. You will need to complete the table to answer the questions. For questions 4-6 remember to use The Rational Rule to determine the answer to "how many" parks. 2. Define MSB 3. Define MSC 4. How many public parks will be built in this town? 5. If the MSC of each public park decrease to $300, what will be the change in the number of public parks built in this town be? 6. Now assume the social benefit gained with each public park is cut in half. As a social cost of $300 per park, how many public parks will be built in this town? Explain. Total Social Quantity Total Social Cost MSB MSC Benefit 1 1,400 500 2,500 1,000 3,400 1,500 4 4,100 2,000 4,600 4,900 5 2,500 3,000 3,500 6 7 5,000 8 5,000 4,000
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