Asked by Sienna Capellas on May 23, 2024
Verified
Allocative efficiency means that
A) the product is produced at the lowest unit-cost possible.
B) society's scarce resources are used to produce products that align with consumer preferences.
C) the product is sold at a price equal to the average cost of producing it.
D) the marginal benefit of the product exceeds its marginal cost.
Allocative Efficiency
An allocation scenario where it's not feasible to enhance one person's well-being without negatively impacting another's.
Scarce Resources
Limited natural, human, and capital resources that cannot satisfy all wants and needs.
Consumer Preferences
Describes the subjective tastes and preferences of individual consumers, influencing their purchasing decisions.
- Detect the signs that exhibit productive and allocative efficiency in the realm of pure competition.
Verified Answer
IC
Ivonne CortesMay 24, 2024
Final Answer :
B
Explanation :
Allocative efficiency occurs when society's scarce resources are used to produce the goods and services that best match consumer preferences, ensuring that the allocation of resources reflects the desires and needs of consumers.
Learning Objectives
- Detect the signs that exhibit productive and allocative efficiency in the realm of pure competition.