The production of too many Matchbox cars and not enough Barbie Dolls is an example of _____ inefficiency.

Question

Quizplus · Accepted Answer

Allocative inefficiency refers to a situation where resources are not allocated in a way that maximizes social welfare. In this case, producing too many Matchbox cars and not enough Barbie dolls implies that the resources are not being allocated efficiently to maximize the satisfaction of consumers.

The Production of Too Many Matchbox Cars and Not Enough