# managerial economics

Engineers at a national research laboratory built a prototype automobile that could be driven 180 miles on a single gallon of unleaded gasoline. They estimated that in mass production the car would cost \$40,000 per unit to build. The engineers argued that Congress should force US automakers to build this energy efficient car. Is energy efficient the same thing as economic efficiency? Why? Under what circumstnaces would the energy-efficient automobile described here be economically efficient? If the goal of society is to get the most benefit from its limited resources, then why not ignore economic efficiency and build the energy saving automobile?

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