-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When 400 pounds of coffee are produced and consumed in Kaffenia each day, that is
A) more efficient than when 300 pounds are produced and consumed because more is always better than less.
B) inefficient because the marginal social benefit exceeds the marginal social cost.
C) inefficient because the marginal social cost of the 400th pound exceeds its marginal social benefit.
D) inefficient because the opportunity cost of producing more coffee exceeds its marginal social benefit.

Question

-The above figure shows the marginal social benefit and marginal social cost curves of coffee in the nation of Kaffenia. When 400 pounds of coffee are produced and consumed in Kaffenia each day, that is
A) more efficient than when 300 pounds are produced and consumed because more is always better than less. 
B) inefficient because the marginal social benefit exceeds the marginal social cost. 
C) inefficient because the marginal social cost of the 400th pound exceeds its marginal social benefit. 
D) inefficient because the opportunity cost of producing more coffee exceeds its marginal social benefit.

Quizplus · Accepted Answer

When the marginal social cost of producing an additional unit exceeds the marginal social benefit, it indicates inefficiency, as resources could be better allocated elsewhere.

-The Above Figure Shows the Marginal Social Benefit and Marginal