If the Marginal Benefit from Another Computer Exceeds the Marginal

question 367

Multiple Choice

If the marginal benefit from another computer exceeds the marginal cost of the computer, then to use resources allocatively efficiently

• A) more resources should be used to produce computers.
• B) fewer resources should be used to produce computers.
• C) if the marginal benefit exceeds the marginal cost by as much as possible, the efficient amount of resources are being used to produce computers.
• D) None of the above is correct because marginal benefit and marginal cost have nothing to do with using resources allocatively efficiently.

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Definitions:

Risk

The potential for loss or unfavorable outcomes in any given situation, often assessed in finance as the variability of returns on investments.

Return

Return refers to the gain or loss on an investment over a specific period, including income received and the change in value, usually expressed as a percentage of the investment’s initial cost.

Investment Horizon

Time horizon for purposes of investment decisions.

Liquidated

Converted assets into cash or paid off a debt, often referring to the process of closing a business and distributing its assets to claimants.