Medical care clearly enhance people's lives. Therefore, we should consume medical care until ?
Correct answer: B. the benefit buyers place on medical care is equal to the cost of producing it
- A. everyone has as much as they would like
- B. the benefit buyers place on medical care is equal to the cost of producing it
- C. buyers receive no benefit from another unit of medical care.
- D. we must cut back on the consumption of other goods.
Explanation
Consumption should continue while the marginal benefit of another unit exceeds its marginal cost. The efficient stopping point is where the buyer's marginal benefit equals the cost of producing that unit.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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