When a nation is under-allocating resources to the production of a good, then the:
A) Marginal benefit is greater than the marginal cost of the good
B) Marginal benefit is less than the marginal cost of the good
C) Marginal cost of producing the good is decreasing
D) Marginal benefit of producing the good is increasing

Question

Quizplus · Accepted Answer

When a nation under-allocates resources to a good, the marginal benefit of producing more of that good exceeds the marginal cost, indicating that more resources should be allocated to increase production.

When a Nation Is Under-Allocating Resources to the Production of a Good