The 80/20 rule is a concept suggesting that:

• A. 80% of consumers make 20% of purchases in a market
• B. 80% of resources are evenly distributed among 20% of the population
• C. roughly 80% of outcomes result from 20% of causes or inputs
• D. 20% of economic growth is due to 80% of government intervention

Answer: (C)

Verified step by step guidance

1. Understand that the 80/20 rule, also known as the Pareto Principle, states that roughly 80% of outcomes come from 20% of causes or inputs. This is a general observation about the distribution of effects in many economic and social phenomena.
2. Recognize that the first two statements describe specific distributions (80% of consumers making 20% of purchases, and 80% of resources distributed among 20% of the population), which are examples of the principle but not the definition itself.
3. Note that the last statement about 20% of economic growth being due to 80% of government intervention reverses the typical 80/20 relationship and is not consistent with the principle.
4. Focus on the core idea: the 80/20 rule highlights an imbalance where a small proportion of causes (20%) lead to a large proportion of effects (80%), which can be applied to various economic contexts such as income distribution, sales, or resource allocation.
5. Summarize that the correct interpretation of the 80/20 rule is that roughly 80% of outcomes result from 20% of causes or inputs, which is the fundamental concept behind the principle.