Efficiency in distribution systems around the world has led to which of the following outcomes?

• A. Complete elimination of market failures in all economies
• B. A guaranteed equal distribution of income and wealth among all individuals
• C. Greater allocative efficiency, where resources are directed toward their most valued uses
• D. A reduction in productive efficiency due to increased government intervention

Answer: (C)

Verified step by step guidance

1. Understand the concept of efficiency in distribution systems, which refers to how well resources are allocated and used to meet the needs and wants of individuals in an economy.
2. Recall that allocative efficiency occurs when resources are distributed in a way that maximizes the overall benefit to society, meaning goods and services are produced according to consumer preferences.
3. Recognize that efficiency in distribution does not imply the complete elimination of market failures, as some inefficiencies and externalities may still exist in real-world markets.
4. Note that efficiency does not guarantee equal distribution of income and wealth, since allocative efficiency focuses on optimal resource use rather than equity.
5. Conclude that improved efficiency in distribution systems leads to greater allocative efficiency, directing resources toward their most valued uses, rather than reducing productive efficiency or increasing government intervention.