If an economy is efficient:
A)all goods are produced at their maximum quantity.
B)all opportunities to make people better off without making other people worse off have been taken.
C)more resources have been used to produce specific consumer goods than producer goods.
D)prices are the lowest they can possibly be.

Question

Quizplus · Accepted Answer

Efficiency in an economy means that all possible ways to increase people's welfare without reducing the welfare of others have been utilized. This means that resources have been allocated efficiently, leading to the maximum possible output. The other options do not necessarily represent efficiency in an economy, as producing all goods at their maximum quantity or using more resources to produce consumer goods than producers goods may not lead to the maximum possible welfare for individuals. Prices being the lowest they can possibly be also does not necessarily indicate efficiency, as it may not reflect the true value of goods and services.

If an Economy Is Efficient