QUESTION ONE. Figure 1A graphs the marginal social benefit (MSB) and marginal social cost (MSC) of making various quantities of bread available per month in a nation. Figure 1B shows the total social benefit (TSB) and the total social cost (TSC) of producing the bread. The marginal social benefit is TSB Q , where TSB is the change in the social benefit of the good and Q is a one-unit increase in the output of bread per month. The marginal social benefit is measured by the slope of the total social benefit curve at any point. Similarly, the marginal social cost, FIGURE 1 : Efficient Output Price, Marginal Benefit and Cost (Kwacha) Page 3 of 5 TSC Q , is measured by the slope of the total social cost curve at any point. Analyse the diagram and answer the following questions. REQUIRED: (A)Explain how can one determine the efficiency of the production of bread from Figure 1A, in the diagram? [5 Marks] (B)Looking at the output corresponding to 10,000 loaves of bread per month (1) in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. [5 Marks] (C)What is the net marginal benefit at point 1 in Figure 1A? [3 Marks] (D)Looking at the output corresponding to 20,000 loaves of bread per month (2) in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. [5 Marks] (E) What is the net marginal benefit at point 1 in Figure 1A? [3 Marks] (F) Looking at the output corresponding to 15,000 loaves of bread per month ( ) in Figure 1A, would one conclude that this monthly output level is efficient or not? Explain why you conclude so. [5 Marks] (G)What is the net marginal benefit at point in Figure 1A? [3 Marks] (H)Explain how can one determine the efficiency of the production of bread from Figure 1B, in the diagram? [5 Marks] (I) Why doesn't the equality of Total Social Benefits to Total Social Costs of making bread in the Figure IB bring about efficiency? [6 Marks]