If the Difference Between the Marginal Benefit and the Marginal

question 113

Multiple Choice

If the difference between the marginal benefit and the marginal cost of a good is as large as possible,

• A) more of the good should be produced.
• B) allocative efficiency has been attained.
• C) resources are being used with maximum efficiency.
• D) resources would create more value producing other goods and hence the production of this good should be decreased.
• E) Both answers A and D are correct.

---

Definitions:

Autarky

An economic system characterized by self-sufficiency, where a region or country aims to produce all it needs without engaging in international trade.

Trade

The exchange of goods or services between parties, which can be within an economy or between economies, allowing for the specialization and efficiency gains.

Volume of Trade

The total quantity of shares or contracts traded for a specific security or market during a specified period.

Import

The act of bringing goods or services into one country from another country for sale or use.