The overallocation of resources by society to a product means that the:
A) marginal benefit is greater than the marginal cost.
B) marginal cost is greater than the marginal benefit.
C) entrepreneurs are making too much profit in the economy.
D) workers are not being paid adequate wages and salaries.

Question

Quizplus · Accepted Answer

When society overallocates resources to a product, it means that too much resources are being used to produce the product than what is socially optimal. In such a scenario, the marginal cost of producing the product is greater than the marginal benefit it provides to the society. It implies that resources are being used inefficiently and could have been better utilized to produce other goods and services that would generate higher benefits for society.

The Overallocation of Resources by Society to a Product Means