Economic efficiency is achieved
A)when all resources are fairly allocated
B)when an economy is producing the maximum possible amount of goods and services
C)when production or allocation of goods cannot be rearranged to make one person better off while harming no one else.
D)if production or allocation of goods cannot be rearranged to make at least one person better off
E)if production or allocation of goods cannot be rearranged in a way the benefits more people than it harms

Question

Quizplus · Accepted Answer

Economic efficiency is achieved when it is impossible to make one person better off without making another person worse off. This concept is known as Pareto efficiency or Pareto optimality. Therefore, option C is the correct choice. Option A refers to fairness, which is not the same as economic efficiency. Option B is incorrect because producing the maximum amount of goods does not necessarily mean that they are allocated efficiently. Option D and E are incorrect because they do not accurately describe the concept of economic efficiency.

Economic Efficiency Is Achieved