Allocative efficiency means that:
A) the law of increasing opportunity costs has reached a maximum.
B) the least costly methods are being used to produce goods and services.
C) resources are being devoted to the production of goods and services most desired by society.
D) the amount of other products that must be sacrificed to obtain production of a given product is at a minimum.

Question

Quizplus · Accepted Answer

Allocative efficiency refers to resources being allocated to the production of goods and services that are most desired and demanded by society. This means that production is aligned with consumer preferences and that society's welfare is maximized.

Allocative Efficiency Means That