In Economic Analysis,at the Optimal Quantity of an Activity

question 80

Multiple Choice

In economic analysis,at the optimal quantity of an activity:

• A)marginal benefit exceeds marginal cost by the greatest amount.
• B)total benefit equals total cost.
• C)marginal benefit equals total benefit.
• D)total benefit exceeds total cost by the greatest amount and marginal benefit equals marginal cost.

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Definitions:

Pareto Optimal

A condition where the distribution of resources cannot be changed without negatively impacting at least one person.

Private Goods Consumption

The act of consuming goods that are excludable and rivalrous in nature, meaning they can only be owned or consumed by one party and consumption by one person prevents consumption by another.

Pareto Optimal

A state of allocation of resources from which it is impossible to make any one individual better off without making at least one individual worse off.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to all members of a society, such as public parks and national defense.