Suppose a country produces only bikes and clothing. The country achieves an efficient allocation of resources when
A) it can't produce any more bikes unless it gives up clothing.
B) it produces equal amount of bikes and clothes.
C) the marginal social benefit of producing a bike equals the marginal social cost of producing a bike.
D) the prices charged for the goods are as low as possible.

Question

Quizplus · Accepted Answer

The efficient allocation of resources occurs when the marginal social benefit of producing a good equals the marginal social cost of producing that good.

Suppose a Country Produces Only Bikes and Clothing