ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An economic situation where no individual would be better off doing something different.
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Description of market / economy that takes all opportunities to make some people better off without making other people worse off.
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Fairness; everyone gets his / her fair share.
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All other relevant factors remain unchanged.
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Detailed explanation-1: -(Pareto efficiency is defined by economists as a situation where no one can be made better off without making someone else worse off.
Detailed explanation-2: -Economic efficiency is when every scarce resource in an economy is used and distributed among producers and consumers in a way that produces the most economic output and benefit to consumers.
Detailed explanation-3: -Economic efficiency in microeconomics refers to the state that manifests optimum resource allocation, the minimum cost for producing goods and services, and maximum outcome. In other words, it also indicates the absence of overproduction or underproduction.
Detailed explanation-4: -A market economy, also known as a free market or free enterprise economy, is a system in which economic decisions, relating to things such as the prices of goods and services, are determined by supply and demand.
Detailed explanation-5: -Resources are allocated efficiently to satisfy consumers’ wants and needs. The price mechanism can operate without the cost of employing people to regulate it. Consumers decide what is and isn’t produced by producers. Prices are kept at their minimum as resources are used as efficiently as possible.