Which of the following terms describes the situation in which all resources are able to move to to highest-valued uses via voluntary exchange?
A) government intervention
B) a market failure
C) economic efficiency
D) an externality

Question

Quizplus · Accepted Answer

Economic efficiency refers to the situation in which all resources are assigned to the highest-valued uses through voluntary exchange, which leads to optimal allocation of resources. A market failure occurs when the market fails to allocate resources efficiently, and government intervention is required to correct the failure. An externality refers to the spillover effects of economic activity on third parties, which can be positive or negative. Therefore, economic efficiency is the best term to describe the scenario described in the question.

Which of the Following Terms Describes the Situation in Which