If the Marginal Benefit of a Good Is Less Than

question 252

Multiple Choice

If the marginal benefit of a good is less than its marginal cost, then the nation should

• A) produce more of that good.
• B) Maintain the current level of production of that good.
• C) reduce the marginal benefit of that good.
• D) reduce the production of that good.

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Definitions:

Capital Intensity Ratio

The Capital Intensity Ratio is a financial metric that measures the amount of investment in capital assets required to generate one dollar of revenue.

Total Asset Turnover Ratio

A financial metric used to assess a company's efficiency in using its assets to generate sales or revenue.

Net Fixed Assets

The value of a company's fixed assets minus depreciation, representing the actual value of the assets in use.

Financial Leverage

The use of borrowed money (debt) to amplify potential returns from an investment or project.