Exchange efficiency means:
A)that we can reallocate a fixed basket of consumption goods among consumers in a way that makes all consumers better off.
B)that we cannot reallocate a fixed stock of inputs among firms so that we can simultaneously expand the output of all goods produced in an economy.
C)that we cannot reallocate a fixed basket of consumption goods among consumers in a way that makes all consumers better off.
D)that we can reallocate a fixed stock of inputs among firms so that we can simultaneously expand the output of all goods produced in an economy.

Question

Quizplus · Accepted Answer

Exchange efficiency refers to a situation where it is not possible to reallocate resources or goods among consumers in a way that would make at least one person better off without making someone else worse off. This implies that the current allocation is efficient in terms of maximizing the welfare of all consumers given the fixed basket of goods.

Exchange Efficiency Means