The central idea of economic efficiency is that ___________________.

Question

Quizplus · Accepted Answer

Economic efficiency requires that the cost of producing a good should not exceed the value that consumers place on the good. The balance between aggregate marginal willingness to pay and the marginal cost of production ensures that resources are allocated efficiently, and production is maximized. Therefore, option B is the correct answer. Option A is incorrect because it assumes that all people have the same preferences, which is not true. Option C is incorrect because the marginal willingness to pay of all consumers may not be the same. Option D is incorrect because maximizing production may not lead to efficiency if the cost of production exceeds the value that consumers place on the good.

The Central Idea of Economic Efficiency Is That ___________________