Question

Would you rather have efficiency or variety? That is, one opportunity cost of the variety of products we have is that each product costs more per unit than if there were only one kind of product of a given type, like shoes. Perhaps a better question is, "What is the right amount of variety? Can there be too many varieties of shoes, for example?"

a. Efficiency is preferred; there can never be too much variety.

b. Variety is preferable, regardless of efficiency.

c. The right amount of variety depends on consumer preferences.

d. Efficiency is preferred, and there can be too much variety leading to inefficiency.

Answer 1

The optimal balance between efficiency and variety is a complex and debated topic with no definitive answer, often hinging on consumer preferences and societal values. Option C is correct.

Step-by-step explanation:

The question of whether to prioritize efficiency or variety in the market is a longstanding economic debate. Critics of market-oriented economies argue that the high costs associated with producing a wide variety of products, such as many types of athletic shoes, breakfast cereals, or automobiles, along with the expenses of marketing and advertising these products, are socially wasteful. They believe that a lesser range of products could satisfy society's needs at a lower cost.

However, proponents of market-oriented systems maintain that the benefits of product differentiation and consumer choice are substantial, as they drive innovation and meet the diverse preferences of consumers. With no definitive formula to determine the "optimal amount of variety," the right balance often depends on consumer preferences and the values placed on variety by society.