Resource use is allocative efficient
A) when it is not possible to produce more of one good.
B) when we produce goods and services that we value most highly.
C) when most resources are fully employed.
D) at any point on the PPF.
E) at all points either on or within the PPF because all these production points are attainable.

Question

Quizplus · Accepted Answer

Allocative efficiency occurs when resources are allocated in a way that produces the mix of goods and services that is most highly valued by society. This means producing the optimal combination of goods that maximizes societal welfare based on preferences and needs. It does not necessarily mean that all resources are fully employed or that more of one good is impossible to produce, so A, C, and D are not correct. While E is also correct in that all points on or within the PPF are attainable, it doesn't fully address the concept of allocating resources efficiently.

Resource Use Is Allocative Efficient