Question

An allocation is efficient if: a. it is technically infeasible to make anyone better off without making someone worse off. b. the surplus is split equally between producers and consumers. c. no individual has an incentive to change behavior. d. profits are maximized.

Answer 1

An allocation is said to be efficient when it is not feasible to make someone better off without making someone worse off.

Step-by-step explanation:

Allocation of resources can be defined as the process of assigning resources to different uses.

If it is technically feasible to make someone better off without making someone worse off, it indicates that the allocation is not efficient. In this situation efficient reallocation of resources can take place.

Allocation is said to be in equilibrium when no one has an incentive to change behavior.