For a government to be efficient,a project should be funded up to
A)MB = 0.
B)MB =
C)MC = 0.
D)MC =
E)MB = MC.

Question

For a government to be efficient,a project should be funded up to
A)MB = 0. 
B)MB = 
C)MC = 0. 
D)MC = 
E)MB = MC.

Quizplus · Accepted Answer

The most efficient use of resources occurs when MB (marginal benefit) equals MC (marginal cost). This ensures that funding is allocated to projects where the benefits exceed the costs, resulting in maximum net social welfare. Therefore, the best choice is E where the funding is allocated until MB is equal to MC.

For a Government to Be Efficient,a Project Should Be Funded