Total
social benefit, according to Hyman (2011), is the quantity of economic good
available in a given period that provides certain satisfaction to those who
consume it. Taxpayers expect to get acceptable returns for every penny spent
though that may not be the case as services provided may not meet their
expectations. Populations often make poor economic projections either because
they do not have the knowledge or they may be driven by interests that suit
their political contributors. When a good is provided to deliver extra gain,
society expects to gain marginal social benefit.
The
minimum amount of money required to compensate producers of a certain good is
the marginal social cost. The amount spent on that good could be a $1 though producers
could be better off if they received more than the $1 initially spent. The
politician’s calculation of the social benefit for space exploration sets a bad
economic precedent. Because his poor
mathematical calculations could cause economic strangulation, the measure must be
reversed or else the results could be catastrophic and financially burdening
for the state coffers and taxpayers. When total social benefit equals total
social cost, we could expect negative gain and no loss. The efficiency of a
provision can be realized when there is equality of marginal social benefit and
marginal social cost.
References
Hyman, D.N. (2011).Public finance: A contemporary application
of theory to policy. Thousand Oaks ,
CA
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