Allocative Efficiency Is Achieved When the Marginal Benefit of a Good

question 228

Multiple Choice

Allocative efficiency is achieved when the marginal benefit of a good

• A) exceeds the marginal cost regardless of how much the difference is.
• B) is less than its marginal cost.
• C) is equal to its marginal cost.
• D) equals zero.
• E) exceeds the marginal cost by as much as possible.

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Definitions:

Incentives Matter

The principle that motivations, whether financial or non-financial, significantly influence the behavior and decisions of individuals or entities.

Personal Costs

Expenses that individuals incur in their daily lives or for personal activities.

Economic Activity

The production, distribution, and consumption of goods and services in an economy.

Benefits

Advantages or monetary assistance received from employment, government, or insurance.