-In the figure above, if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources.
A) marginal cost of a computer exceeds the marginal benefit of a computer, so more computers
B) marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers
C) marginal benefit of a computer exceeds the marginal cost of a computer, so more computers
D) marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers

Question

-In the figure above, if 4 million computers are produced per year then the ________ should be produced to achieve the allocatively efficient use of resources.
A) marginal cost of a computer exceeds the marginal benefit of a computer, so more computers 
B) marginal cost of a computer exceeds the marginal benefit of a computer, so fewer computers 
C) marginal benefit of a computer exceeds the marginal cost of a computer, so more computers 
D) marginal benefit of a computer exceeds the marginal cost of a computer, so fewer computers

Quizplus · Accepted Answer

Allocative efficiency is achieved when the marginal cost (MC) of producing a good equals the marginal benefit (MB) to consumers. If the MC exceeds the MB, it indicates that resources are being overused for producing that good, and production should decrease to reach allocative efficiency.

-In the Figure Above, If 4 Million Computers Are Produced