Refer to Figure 16.1. The efficient amount of fertilizer is

A) zero because any level of production involves an external cost.
B) 50 bags.
C) 60 bags.
D) indeterminate from this information.

Question

Refer to Figure 16.1. The efficient amount of fertilizer isA)  zero because any level of production involves an external cost.B)  50 bags.C)  60 bags.D)  indeterminate from this information.

SHASHI PARMAR · Accepted Answer

Final Answer : B, Explanation :  The efficient amount of fertilizer is determined at the point where the marginal social cost (MSC) equals the marginal private benefit (MPB). In the context of environmental economics, this is where the external costs of using the fertilizer (such as pollution) are fully accounted for alongside the private benefits (such as increased crop yields). Without seeing Figure 16.1, the correct answer cannot be determined directly from the question. However, based on standard economic principles, the efficient amount would be where these two curves intersect. Since the specific choice must be made from the provided options and without the figure, this explanation outlines the general principle for determining the efficient amount of a resource like fertilizer.

Refer to Figure 16.1. The efficient amount of fertilizer is

A) zero because any level of production involves an external cost.
B) 50 bags.
C) 60 bags.
D) indeterminate from this information.

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