Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A firm producing at a level where marginal cost equals marginal revenue
B
A government increasing taxes to fund public services
C
A consumer buying the cheapest product without considering quality
D
A farmer choosing to plant crops based on personal preference rather than market demand
Understanding the Answer
Let's break down why this is correct
Answer
Finding optimal choices in economic efficiency means making decisions that use resources in the best way possible to achieve the desired outcome. For example, imagine a farmer who has a limited amount of water to irrigate his crops. If he uses all his water on one crop, it may produce a lot, but the other crops might suffer and yield very little. Instead, if he divides the water among all his crops, he can get a better overall harvest, even if each crop produces less than it could have with all the water. This shows that the optimal choice is not just about maximizing one thing but finding a balance that leads to the best overall result.
Detailed Explanation
When a firm produces where marginal cost equals marginal revenue, it means they are maximizing their profit. Other options are incorrect because Increasing taxes to fund services may not directly relate to making the best economic choices; Buying the cheapest product without thinking about quality can lead to poor choices.
Key Concepts
economic efficiency
Topic
Finding Optimal Choices
Difficulty
easy level question
Cognitive Level
understand
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