When<br/>the marginal benefit and marginal cost of sodas are equal, then<br/>____. A: the<br/>production of sodas might be allocatively efficient but it is<br/>definitely production inefficient B: the<br/>allocatively inefficient amount of sodas is being produced C: more<br/>sodas should be produced to reach the allocatively efficient quantity D: the<br/>allocatively efficient amount of sodas is being produced

A country produces only pencils and erasers. Pencil production is allocatively efficient if the marginal ________ of a pencil equals the marginal ________ of ________. A: cost; benefit; an eraser B: cost; cost; an eraser C: benefit; benefit; an eraser D: benefit; cost; a pencil

In the above figure, if 4000 bicycles are produced per month, A: marginal benefit is greater than marginal cost. B: fewer bicycles should be produced to reach the allocatively efficient level of output. C: the marginal cost of production is 2 bottles of soda per bicycle. D: Both answers A and B are correct.

In the above figure, when 2000 bicycles are produced each month, we can see that A: the marginal benefit from another bicycle is greater than the marginal cost of another bicycle. B: more bicycles should be produced to reach the allocatively efficient level of output. C: the economy is very efficient at the production of bicycles because the marginal benefit exceeds the marginal cost. D: Both answers A and B are correct.