At the current level of output, the marginal social benefit of pizza exceeds the marginal social cost of pizza. Compared to the allocatively efficient quantity, we are producing too _______ pizza and too _______ of other goods.
A) little; much
B) little; little
C) much; much
D) much; little

Question

Quizplus · Accepted Answer

When the marginal social benefit of a good exceeds its marginal social cost, it indicates that society values the good more than it costs to produce it. Therefore, producing more of that good (in this case, pizza) would increase overall welfare, implying that currently, there is too little pizza being produced and too much of other goods.

At the Current Level of Output, the Marginal Social Benefit