The choice on a production possibilities set that is socially preferred, or the choice on an individual's budget constraint that is personally preferred, will display _____________________.
A) allocative efficiency
B) the production possibilities frontier
C) trade-offs
D) scarcity

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when resources are distributed in a way that is most beneficial or preferred by society (in the case of a production possibilities set) or by an individual (in the case of a budget constraint). This means that the choice reflects the best possible satisfaction of wants with the available resources.

The Choice on a Production Possibilities Set That Is Socially