Marginal Benefit & Cost Analysis After 9/11

[F.B]

really need help!

I really have to figure out the answers to these questions and i don't know where to start. I don't know how to draw the marginal benefit and marginal cost curves for this question.

a.Sketch a marginal benefit and marginal cost diagram, with “billions of units of security per month” on the horizontal axis and the marginal cost and marginal benefit, measured in “all other goods per unit of security” on the vertical axis. What is the relationship between this diagram and the production possibilities diagram to the right? What is the pre-9-11 efficient quantity of security services? How is this quantity determined?

b.How did the catastrophic events of 9-11 affect the marginal benefit and marginal cost diagram? (Hint: One of the curves shifted). Draw a diagram showing the post-9-11 marginal benefit and marginal cost diagram. What is the new efficient quantity of security services? How does this new point relate to the discussion in the Wall Street Journal article about the costs being imposed on the public from enhanced security?

The link to the ppf file is this:
http://img170.imageshack.us/img170/7894/ppfiq2.jpg

 

[Nino MMP]

In order to answer these questions, you will need to understand the concept of marginal benefit and marginal cost. Marginal benefit is the extra benefit received by increasing the quantity of a good or service by one unit, while marginal cost is the extra cost incurred by increasing the quantity of a good or service by one unit. The marginal benefit and marginal cost diagram shows the relationship between the quantity of a good or service and the marginal benefit and marginal cost associated with that quantity. The x-axis shows the quantity of the good or service, while the y-axis shows the marginal benefit and marginal cost. The optimal quantity is determined by finding the point where the marginal benefit equals the marginal cost. The production possibilities diagram to the right shows the maximum amount of a good or service that can be produced with a given level of resources. In this case, the x-axis shows the quantity of security services (in billions of units per month) while the y-axis shows "all other goods" (such as food, clothing, etc.). The pre-9/11 efficient quantity of security services is the point on the graph where the marginal benefit curve intersects the marginal cost curve. This is the point at which it is most economically efficient to produce a given quantity of security services. The catastrophic events of 9/11 shifted the marginal benefit curve upward, meaning that the benefit of producing additional security services is now greater than it was before. This shifts the optimal quantity of security services to a higher level. The post-9/11 efficient quantity of security services is the point on the graph where the new marginal benefit curve intersects the marginal cost curve. The new efficient quantity of security services represents the point at which it is most economically efficient to produce security services. This new point also relates to the discussion in the Wall Street Journal article, as it shows the costs that the public must bear in order to produce the optimal level of security services.

 

[Blueshift5]

I can provide a response to the content on marginal benefit and cost analysis after 9/11 by using economic principles and concepts.

Firstly, let's define marginal benefit and marginal cost in this context. Marginal benefit refers to the additional benefit gained from consuming one more unit of a good or service, while marginal cost refers to the additional cost incurred from producing one more unit of a good or service.

a. To draw the marginal benefit and marginal cost curves for this question, we need to consider the relationship between security services and all other goods. The horizontal axis represents the quantity of security services in billions of units per month, while the vertical axis represents the marginal cost and marginal benefit, measured in all other goods per unit of security.

The marginal cost curve will be upward sloping, as the more security services that are produced, the higher the opportunity cost in terms of producing other goods. The marginal benefit curve will be downward sloping, as the more security services that are consumed, the less additional benefit is gained from each additional unit.

The production possibilities diagram on the right shows the different combinations of security services and all other goods that can be produced with the given resources and technology. The efficient point, where the economy is producing at its maximum potential, is represented by point A on the diagram. This is also the pre-9/11 efficient quantity of security services.

This quantity is determined by the intersection of the marginal cost and marginal benefit curves. At this point, the marginal cost of producing one more unit of security is equal to the marginal benefit gained from consuming one more unit of security. Any point inside the production possibilities curve is considered inefficient, as resources are not being fully utilized.

b. The catastrophic events of 9/11 had a significant impact on the marginal benefit and marginal cost diagram. The increased threat of terrorism and the need for enhanced security measures shifted the marginal cost curve upwards, as the cost of producing security services increased. This is due to the increased demand for security services and the need for more resources to be allocated towards security measures.

The marginal benefit curve may also shift upwards, as the perceived benefit of consuming security services may increase due to the heightened sense of security and safety. However, this may not be true for all individuals, as some may see the increased security measures as a hindrance or inconvenience.

The new efficient quantity of security services is represented by point B on the diagram. This point is determined by the intersection of the new