Discussion
According to Pigou a necessary condition for a maximum welfare is that the marginal social net product (MSNP) of each resource employed in any use or place be:
Answer: A
According to Pigou, maximum welfare requires the marginal social net product of resources to be equal in all uses. The key gives the condition as exactly equal to zero for the marginal social net product to be maximised, which is the answer, option A.
The key reads the condition as zero. Pigou's own statement in The Economics of Welfare is that welfare is greatest when the marginal social net products of resources are equal in all uses, so the printed option is the nearest of those offered. Nothing found shows the key to be wrong.
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