When the Marginal Benefit of an Output Exceeds the Marginal

question 122

Multiple Choice

When the marginal benefit of an output exceeds the marginal cost:

• A) Production of that output should be increased, in order to achieve efficiency
• B) Production of that output should be decreased, in order to achieve efficiency
• C) Increasing the production of that output would increase the deadweight loss
• D) Reducing the production of that output would reduce efficiency losses

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Definitions:

Budget Constraint

A financial limit that represents the combination of goods and services an individual can purchase with their available income.

Gardenburger

A brand of vegetarian burgers made from a range of ingredients such as vegetables, whole grains, and cheeses, catering to vegetarians and those seeking meatless meal options.

Monthly Income

The total amount of money earned or received by an individual or entity in one month, from sources such as wages, investments, rent, and other earnings.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods.