Efficiency is consistent with
A)minimizing net benefits.
B)equating marginal benefits and marginal costs.
C)maximizing total benefits.
D)minimizing total costs.

Question

Quizplus · Accepted Answer

Efficiency in economics is achieved when marginal benefits (MB) equal marginal costs (MC). This is because at this point, society is getting the most benefit from its resources, and any further increase in production would come at a cost that would outweigh the benefits. Minimizing net benefits (A) or minimizing total costs (D) may lead to inefficiencies because they do not take into account the trade-offs between costs and benefits. Maximizing total benefits (C) may also be inefficient because it does not take into account how marginal benefits and costs are changing.

Efficiency Is Consistent with