Inefficiency exists in an economy when a good is
A)not being consumed by buyers who value it most highly.
B)not distributed fairly among buyers.
C)not produced because buyers do not value it very highly.
D)being produced with less than all available resources.

Question

Quizplus · Accepted Answer

Inefficiency occurs when a good is not being consumed by buyers who value it most highly. This means that there is a mismatch between the preferences and demand of the buyers and the supply of the goods, leading to resources being used in a way that does not maximize their value or benefit to society as a whole. When goods are not consumed by those who value them most highly, there is a loss of potential welfare gains that could have been generated if the goods had been allocated efficiently.

Inefficiency Exists in an Economy When a Good Is