Question

llocative efficiency is a situation in which the quantities of goods and services produced are those that people​ _____ - it is not possible to produce more of a good or service​ _____ some of another good that people​ _____.

Answer 1

The correct answer is: value highly; without giving up value highly.

Step-by-step explanation:

Allocative efficiency refers to the situation where all the resources are being spent on those bundles of goods that are preferred or valued highly by people.

We are aware that we have fixed or scarce resources and we need to allocate these to alternative uses. To increase the production of one good or service, we need to give up producing another good or service preferred by people.

This is the opportunity cost of increasing production of a good.