When an economy produces a good such that the marginal benefit equals the marginal cost, this indicates that
Blank
______.

BlackTom题目解析

Question

When an economy produces a good such that the marginal benefit equals the marginal cost, this indicates that 
Blank
______.

BlackTom题目解析

BlackTom AI · Accepted Answer

Start by restating the core idea: the question asks what it indicates when marginal benefit equals marginal cost in an economy's production of a good.
Option 1: 'the unemployment rate is at its minimum' — This statement is not a direct implication of MB = MC. Unemployment relates to labor market conditions, not the efficiency of resource allocation in a specific good's production. So this is not the correct takeaway from MB = MC.
Option 2: 'resources are being allocated efficiently' — This aligns with the fundamental economic principle that when MB equals MC for a good, the allocation of resources to that good is efficient in the sense that the net social benefit is maximized; any reallocation would reduce total welfare. This is the central interpretation of MB = MC in cost-benefit terms.
Option 3: 'society would be better off by increasing the output of the good' — If MB equals MC, increasing output would raise marginal cost at a rate that surpasses marginal benefit, so total net benefit would not increase. Thus this option misstates the implication of MB = MC.
Option 4: 'society's well-being would increase by decreasing the output of the good' — Conversely, reducing output when MB = MC would lower total net benefit for the same reason; there is no welfare gain from decreasing output at the equality point. This option is also incorrect.
In summary, the correct interpretation hinges on recognizing that MB = MC signals that current production is at an efficient allocation point, whereas the other options describe scenarios not supported by the equality condition MB = MC. The reasoning rejects misinterpretations about unemployment, and about the benefits of increasing or decreasing output when marginal values are balanced.

When an economy produces a good such that the marginal benefit equals the marginal cost, this indicates that Blank ______. BlackTom题目解析

View Explanation

Log in for full answers

Similar Questions

The condition for allocative efficiency is violated when

The following questions refer to the monopoly graph below, where MC = marginal cost, ATC = average total cost, D = demand, and MR = marginal revenue. Which Q and P represents allocative efficiency?

Imperfectly competitive markets do not achieve allocative efficiency because profit maximization for each firm occurs when which of the following is true?

Production occurs up to that level of output at which price Blank ______ marginal cost, resulting in allocative efficiency under pure competition.

The allocatively efficient level of output is produced in any market structure when

The condition for allocative efficiency is

A situation in which an economy is using its resources to produce the best combination of goods and services to satisfy consumer desires is called

A monopolistically competitive industry does not display _ because ________.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler