Which of the following statements can used to describe efficiency?
I. Efficiently using resources means that producers make the highest profits possible.
II. Using resources efficiently means that we cannot produce more of one good without producing less of another good that has a higher value.
III. Resource use is efficient when we produce goods and services that people value most highly.
A) I only
B) I and II
C) II and III
D) I, II and III

Question

Quizplus · Accepted Answer

Efficiency in economics typically refers to the optimal production and allocation of resources to maximize value and minimize waste. Statement II captures the idea of opportunity cost, indicating that to produce more of one good, we must give up producing another of higher value, which is a core concept in understanding efficiency. Statement III directly states that resources are used efficiently when they are directed towards producing goods and services that are most valued by society. Statement I is incorrect because efficiency is not solely about maximizing profits but about the optimal use of resources to meet societal needs and preferences.

Which of the Following Statements Can Used to Describe Efficiency