Multiple Choice
The property of society getting the most it can from its scarce resources is called:
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0. Basic Principles of Economics
Allocative Efficiency, Productive Efficiency, and Equality
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The production of a good or service in the least costly way is known as ______ efficiency.
A
allocative
B
dynamic
C
distributive
D
productive
Verified step by step guidance1
Understand the definitions of the different types of efficiency in microeconomics:
Allocative efficiency occurs when resources are distributed in a way that maximizes consumer satisfaction, meaning the mix of goods produced matches consumer preferences.
Dynamic efficiency refers to the ability of an economy to improve production methods and innovate over time, leading to better products or lower costs in the future.
Distributive efficiency (often called equity) relates to how resources and wealth are shared across society, focusing on fairness rather than cost or output.
Productive efficiency is achieved when a good or service is produced at the lowest possible cost, meaning the firm is using its resources in the most cost-effective way without waste.
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