If an allocation of resources is efficient, then
A)consumer surplus is maximized.
B)producer surplus is maximized.
C)all potential gains from trade among buyers are sellers are being realized.
D)the allocation achieves equality as well.

Question

Quizplus · Accepted Answer

An efficient allocation of resources means that all potential gains from trade among buyers and sellers are being realized, indicating that resources are being used in the most productive way possible. This does not necessarily mean that consumer surplus, producer surplus is maximized, or that the allocation achieves equality.

If an Allocation of Resources Is Efficient, Then