Which of the following statements about the utilization of a resource is true?

• A. Equality is achieved when all resources are distributed equally among producers, regardless of efficiency.
• B. Allocative efficiency is achieved when every resource is used to produce only one type of good.
• C. Productive efficiency means resources are used to produce the maximum possible output, regardless of what society wants.
• D. Allocative efficiency occurs when resources are used to produce the combination of goods and services most valued by society.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the key concepts involved: productive efficiency, allocative efficiency, and equality in resource distribution.
2. Step 2: Define productive efficiency as the situation where resources are used to produce the maximum possible output, meaning no resources are wasted.
3. Step 3: Define allocative efficiency as the allocation of resources to produce the combination of goods and services that best matches society's preferences and needs.
4. Step 4: Recognize that equality in resource distribution means resources are shared equally among producers, but this does not necessarily lead to efficiency or optimal outcomes.
5. Step 5: Compare the given statements to these definitions to identify which one correctly describes the utilization of resources in terms of efficiency and societal value.