When an economy produces at its allocatively efficient production point,
A)resources are not limited.
B)scarcity is not a problem.
C)a society can increase the production of all goods.
D)a society can increase the production of one good only by decreasing the production of some other good that is valued more highly.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when resources are distributed in a way that maximizes the total benefit to society. At this point, producing more of one good would require sacrificing some of another good that is valued more, indicating that resources are being used optimally.

When an Economy Produces at Its Allocatively Efficient Production Point