Suppose That at Current Production Levels, Marginal Social Benefit Is

question 34

Multiple Choice

Suppose that at current production levels, marginal social benefit is $75 while marginal cost is $80. We know that:

• A) the efficient level of output is being produced.
• B) the level of output should be decreased in order to improve efficiency.
• C) the level of output should be increased in order to improve efficiency.
• D) output should be redistributed so those with lower income will be able to consume more.

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Definitions:

Verity

signifies the quality or state of being true or real.

Vitality

The quality or state of being full of life, energy, and vigor.

Justice

The principle or ideal of fairness and moral righteousness, especially in the administration of the law.

Chancellor

A high-ranking official in certain legal or educational institutions, or a judge in courts of equity.