An increase in efficiency means that an economy has:
A)reduced its opportunity costs.
B)increased the equity of its distribution of goods and services.
C)made more people better off without making others worse off.
D)increased the incentives for its citizens to follow their own self-interest.

Question

Quizplus · Accepted Answer

Increasing efficiency means producing more output with the same level of inputs, which translates into higher productivity and lower costs. This, in turn, leads to an increase in the total level of goods and services available in the economy, which can benefit everyone. If the benefits are distributed in a way that makes more people better off without hurting others, then the economy has achieved Pareto efficiency, which is a desirable outcome. Therefore, the correct answer is C.

An Increase in Efficiency Means That an Economy Has