Question

Inefficient allocation of resources occurs when

a. society is operating at a point low on the production possibilities frontier.
b. it is possible to make some people better off without making others worse off.
c. society is operating at a point high on the production possibilities frontier.

Answer 1

A. society is operating at a point low on the production possibilities frontier

Step-by-step explanation:

• The allocative inefficiency states that the consumer does not pay the sufficient or an efficient price of the product as the revenue received in not adequate to encourage the continued supply.

• As its the combination of inputs outputs and the distribution that leads to the formation of productive efficiency. This means the economy thus is producing less than that of its maximum possible outputs of goods and services, from there resources.

• Also called as the Pareto efficiency.