Fixed fee contracts are desirable when there is little uncertainty regarding the output

Four stores have a problem with theft and security is a public good. Let S stand for the number of person-hours of security patrols per week. The marginal benefit of security patrols to each of the stores is given by the formula MB = 200 - 2S. Patrols cost $20 per hour. Which of the following gives the marginal social benefit function?

A. MSB = 50 - 0.5S B. MSB = 800 - 8S C. MSB = 800 - 2S D. MSB = 196 - 2S

Under a system of pollution taxes, we expect firms to cut pollution until the marginal benefit from tax savings equals the marginal increase in production costs due to decreasing pollution.

Answer the following statement true (T) or false (F)