In microeconomics, what does the maximum utilization of a resource correspond to?

• A. Allocative efficiency, where resources are distributed according to consumer preferences
• B. Equality, where resources are distributed evenly among all individuals
• C. Productive efficiency, where resources are used to produce the maximum possible output at the lowest cost
• D. Market equilibrium, where supply equals demand

Answer: (C)

Verified step by step guidance

1. Understand the concept of resource utilization in microeconomics, which refers to how effectively resources are used to produce goods and services.
2. Recall that productive efficiency occurs when resources are used in such a way that the maximum possible output is produced at the lowest possible cost.
3. Recognize that allocative efficiency relates to the distribution of resources according to consumer preferences, not necessarily the maximum use of resources.
4. Note that equality refers to the even distribution of resources among individuals, which is a social concept rather than a measure of resource utilization.
5. Market equilibrium is the point where supply equals demand, which balances the market but does not directly indicate maximum resource utilization.