When we cannot produce more of any good without giving up some other good that we value more highly, we have achieved
A) equity.
B) economic growth.
C) production.
D) allocative efficiency.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when we allocate resources in a way that maximizes overall satisfaction or utility. This means producing the combination of goods and services that society most desires based on their preferences. When we cannot produce more of any good without giving up some other good that we value more highly, we have reached a point where we cannot improve allocative efficiency any further. Thus, the correct answer is D) Allocative efficiency.

When We Cannot Produce More of Any Good Without Giving