Allocative efficiency refers to
A) producing the goods and services most highly valued.
B) using the least amount of labor to produce output.
C) producing the maximum possible amount of output.
D) obtaining the least output with the most inputs.
E) producing at any point on the PPF.

Question

Quizplus · Accepted Answer

Allocative efficiency refers to producing the goods and services that are most highly valued by consumers. This means that resources are being allocated in a way that maximizes consumer satisfaction and welfare. It is not about producing the maximum amount of output or using the least amount of labor, but rather about producing the right amount of goods and services to meet consumer demand. Therefore, option A is the correct answer.

Allocative Efficiency Refers to