When the Amount of Output Is Such That Marginal Social

question 121

Multiple Choice

When the amount of output is such that marginal social benefit exceeds marginal social cost, then to reach the efficient quantity

• A) production should be increased.
• B) production should be decreased.
• C) production should remain constant.
• D) More information is needed to determine if production should be increased, decreased, or not changed.

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Definitions:

Resource

An asset or input used to produce goods and services, including time, money, labor, and natural resources.

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product, leading to price takers on both sides of the market.

Imperfectly Competitive Market

A market structure where individual sellers have some control over the price of their goods due to product differentiation or other factors.

Total Product

The overall quantity of output that a firm produces, usually in relation to a given input of labor or capital.