Could I switch tires on an MTB to tires with less friction if I mostly use the MTB in a city environment? I thought MTBs were OK to use in the city but the friction from the tires seem to hold the bike back more than other tires would. 

I got a mountain bike (Scott) and it's less than optimal on flat city roads. It's like comparing dubbed tired with tires that are not dubbed(?)

So I'm thinking of switching tires to flatter tires making it easier to pedal the bike in a city environment.

Would this be a good or bad idea? Should I instead just get a regular city bike for use in the city?
You can certainly switch to a more appropriate tire. Schwalbe Big Apples are a popular choice -- I use their 26x2.0 tires on my mountain bike. They roll well on asphalt, and are quite functional on packed dirt and gravel. They're not suitable for loose dirt/gravel, rocks, roots, etc, you'll need a knobby mountain bike tire for those.

The only real downside to this plan: If you intend to ride your bike in the city, and often ride trails as well, you'll quickly tire (pun intended) of switching between your mountain tires and your city tires. If you reach that point, you might consider buying a separate set of wheels and keeping the mountain tires mounted on one and the city tires on the other.