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.

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