Which of the following best describes 'allocative efficiency'?

Which of the following best describes 'allocative efficiency'?

Step 1: Understand what allocative efficiency means. It refers to a situation where resources are allocated in a way that maximizes the overall satisfaction or welfare of society.
Step 2: Recognize that allocative efficiency is achieved when the quantity of goods produced matches the quantity that consumers want to buy at the price they are willing to pay.
Step 3: Identify that when resources are used efficiently, it means that no one can be made better off without making someone else worse off. This is known as Pareto efficiency.
Step 4: Conclude that the best description of allocative efficiency is when resources are distributed to maximize total welfare, which is why option 0 is the correct answer.

No concepts available.