Allocative efficiency occurs when:

• A. income is distributed equally among all members of society
• B. resources are distributed so that the value of the last unit produced equals the value consumers place on it
• C. goods are produced at the lowest possible cost
• D. the marginal cost of production is greater than the marginal benefit to consumers

Answer: (B)

Verified step by step guidance

1. Understand the concept of allocative efficiency: it occurs when resources are allocated in a way that maximizes the overall benefit to society, meaning the goods produced are exactly those most desired by consumers.
2. Recall that allocative efficiency is achieved when the value consumers place on the last unit produced equals the cost of producing that unit, ensuring no resources are wasted or underutilized.
3. Express this condition mathematically as: \(\text{Marginal Benefit (MB)} = \text{Marginal Cost (MC)}\).
4. Recognize that this equality means the price consumers are willing to pay for the last unit (reflecting its value to them) matches the cost of producing it, which aligns production with consumer preferences.
5. Conclude that among the given options, allocative efficiency corresponds to the statement that resources are distributed so that the value of the last unit produced equals the value consumers place on it.