An efficient allocation of labor occurs when the
A) marginal benefit to workers exceeds the marginal benefit to firms.
B) marginal benefit to firms exceeds the marginal benefit to workers.
C) marginal cost to workers is equal to the marginal benefit to firms.
D) marginal cost and marginal benefit of both workers and the firms are equal to zero.
E) marginal benefit of workers exceeds the marginal cost to firms by as much as possible.

Question

Quizplus · Accepted Answer

An efficient allocation of labor occurs when the marginal cost to workers (the opportunity cost of their time, effort, etc.) is equal to the marginal benefit to firms (the value the firm gets from the labor). This ensures that the labor is being used in the most productive way possible, balancing the costs and benefits across workers and firms.

An Efficient Allocation of Labor Occurs When the