Note AcademyNote Academy
Start

Economics (AS & A Level) · Oct / Nov 2022 · Paper 32 · Question 13

9708Private costs and benefits, externalities and social costs and benefits

The government wants to regulate the consumption of a demerit good in order to increase society's net welfare. In which situation will society's net welfare increase?

  1. AThe fall in the marginal social benefit is greater than the fall in the marginal social cost.
  2. BThe fall in the marginal external cost is greater than the fall in the marginal external benefit.
  3. CThe fall in the total social benefit is greater than the fall in the total social cost.
  4. DThe fall in the total social cost is greater than the fall in the total social benefit.

As printed in the paper

Show the answer

Correct answer: D. The fall in the total social cost is greater than the fall in the total social benefit.

Sit this whole paper →More on Private costs and benefits, externalities and social costs and benefits

Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.