An efficient allocation of goods in an exchange economy means that:
A) goods were produced by the most efficient technology available.
B) no one can be made better off without making somebody else worse off.
C) those made worse off are not hurt as badly as the benefits resulting from those made better off. That is, there is a net positive gain.
D) in a particular production process one gets the maximum output for a given input.

Question

Quizplus · Accepted Answer

An efficient allocation of goods in an exchange economy, as described by the concept of Pareto efficiency, means that no one can be made better off without making somebody else worse off. This implies an optimal distribution of resources where improving one person's situation would require harming another's, indicating that resources are allocated in the most efficient manner possible under the given circumstances.

An Efficient Allocation of Goods in an Exchange Economy Means