When society overallocates resources to 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.

Question

Quizplus · Accepted Answer

When society overallocates resources to a product, it means that the marginal benefit (the additional benefit received from consuming one more unit of the product) is less than the marginal cost (the additional cost incurred from producing one more unit of the product). This indicates an inefficient allocation of resources and suggests that resources could be better utilized in other areas with a higher marginal benefit to cost ratio.

When Society Overallocates Resources to a Product It Means That