When less than the efficient amount of a good is produced, how does the marginal benefit of the last unit produced compare to its marginal cost?
What will be an ideal response?
When less than the efficient amount of a good is produced, the marginal benefit of the last unit produced exceeds its marginal cost. The fact that the marginal benefit exceeds the marginal cost indicates that producing additional units of the good will move the amount of production closer to the efficient quantity.
You might also like to view...
The US is experiencing a technological boom. Relative to the other countries with lower technological growth, we expect to see the dollar
a. Appreciate b. Depreciate c. Stay constant in value d. None of the above
If the price of paint increases, the substitution effect will cause
a. people to paint their homes more often b. people to use more paint than they did before c. the quantity of paint demanded to increase d. the quantity of paint supplied to decrease e. people to use less paint
When was the first U.S. paper currency, the greenback, created?
a. During the Revolutionary War b. During World War I c. During World War II d. During the Civil War e. During the war of 1812.
In the late 1920s, you could buy $10,000 worth of stock by putting down as little as
A. $100. B. $1,000. C. $2,500. D. $5,000.