Which of the following statements is true about productive and allocative efficiency?

Question

Quizplus · Accepted Answer

Allocative efficiency refers to the optimal allocation of resources that produces a combination of goods and services that consumers value most highly. Productive efficiency, on the other hand, is achieved when the economy produces goods and services at the lowest possible cost. Realizing allocative efficiency implies that the optimal allocation of resources has been achieved, which would require that resources are being used in the most efficient way possible, thereby also achieving productive efficiency. Therefore, option A is correct.

Which of the Following Statements Is True About Productive and Allocative