When are resources considered wasted in economic production?

Resources in economic production are considered wasted when marginal benefit is less than marginal cost. This situation indicates that the cost of producing an additional unit exceeds the value that the unit adds to the production process or the satisfaction it provides to consumers.

When marginal benefit is less than marginal cost, continuing production is inefficient: the resources could be better allocated elsewhere, potentially generating more value. In essence, this inefficiency leads to a misallocation of societal resources, where the effort and resources invested in production do not yield adequate returns. Therefore, resources should be utilized in ways that ensure the marginal cost aligns with or is lower than the marginal benefit to maximize productivity and efficiency in an economy.

In contrast, other scenarios like producing when marginal benefit exceeds marginal cost represent a scenario where production is beneficial, as the additional unit contributes more value than it costs. When marginal benefit equals total cost, it does not imply waste but rather a break-even condition, and total benefit being less than total cost indicates a complete inefficiency but does not specifically address marginal considerations.