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21 October, 21:11

When the marginal social benefit curve is relatively steep butunknown, a quantity-based instrument will yield a larger welfare loss on average than will a price-based instrument.

a. True

b. False

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  1. 21 October, 23:20
    0
    Answer: False

    Explanation: The marginal social benefit curve defines the benefits society get from the production of an additional unit. It occurs when consumers are the only group deriving benefit from a product and the steepness of the curve shows the increasing or decreasing benefits derived; describes the net social value of any product, activity or service. When the curve is relatively steep but there exists uncertainty about the marginal social benefit curve, a dead weight loss is created which is the same for price and quantity instruments.
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