When society overallocated resources to the production of a product it means that the _____.
(a) investment in the product is declining
(b) opportunity cost of the product is decreasing
(c) marginal benefit is greater than the marginal cost
(d) marginal benefit is less than the marginal cost.
Overallocation of Resources:
Since resources in an economy are scarce, an economic system that can currently allocate these scarce resources is needed. In a perfect world, all markets should be able to deliver allocative efficiency.
Answer and Explanation: 1
The correct option is (d) marginal benefit is less than the marginal cost.
An overallocation of resources to the production of a product means that...
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fromChapter 3 / Lesson 20
Understand what allocative efficiency is and when it occurs. Learn the definition and formula for allocative efficiency, and see examples of allocative efficiency.