When Every Good or Service Is Produced Up to the Point

question 219

Multiple Choice

When every good or service is produced up to the point where the last unit provides ________, allocative efficiency occurs.

• A)a marginal benefit to society equal to the marginal cost of producing it
• B)a marginal benefit to society greater than the marginal cost of producing it
• C)a marginal benefit to society less than the marginal cost of producing it
• D)a marginal benefit to society equal to zero

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Definitions:

American Wheat

Refers to wheat produced in the United States, a major global exporter of wheat, known for its quality and used both domestically and internationally.

Derived Demand

The demand for a good or service that arises from the demand for another good or service; for example, the demand for steel is derived from the demand for automobiles.

Wage Rate

The amount of money a worker is paid per unit of time, such as an hour or a month.

Marginal Physical Product

The additional output resulting from one more unit of a specific input, assuming all other inputs remain constant.