Which of the following is true?
i.Production efficiency occurs only when resources are used to produce the combination of goods that has the greatest value.
ii.Allocative efficiency occurs when marginal benefit equals marginal cost.
iii.A demand curve is a marginal cost curve.
A) only ii
B) only i
C) only iii
D) i and ii
E) ii and iii

Question

Quizplus · Accepted Answer

ii. Allocative efficiency occurs when the economy allocates its resources so that no additional net benefit can be gained from reallocation, which happens when marginal benefit equals marginal cost. Production efficiency is about producing goods at the lowest possible cost, not necessarily the combination with the greatest value. A demand curve represents the relationship between the price of a good and the quantity demanded, not the marginal cost curve.

Which of the Following Is True