Question

Economic __________________ is a state in which no one can be made better off without making someone else worse off. Increased output cannot be achieved without first increasing the quantity or quality of inputs.

Wordbank:

["Absolute Advantage", "Adam Smith", "Capital", "Capitalism", "Ceteris Paribus", "Circular Flow", "Communism", "Comparative Advantage", "Competitive", "Economic Efficiency", "Economic Equity", "Economic Growth", "Economic Security", "Economics", "Economy", "Efficiency", "Entrepreneurship", "Imperfect", "Industry", "Keynes", "Marx", "Labor", "Land", "Law of Diminishing Marginal Utility", "Law of Diminishing Returns", "Law of Increasing Costs", "Law of Opportunity Costs", "Market", "Monopolistic Competition", "Monopoly", "Normative", "Oligopoly", "Perfect", "Perfect Competition", "Positive", "Production Possibilities Curve", "Scarcity", "Shortage", "Product Market", "Factor Market", "Socialism", "Scarce", "Command Economy", "Free Market Economy", "Mixed Economy", "Traditional Economy", "Firm", "Complementary", "Substitute", "Price", "Demand", "Supply", "Opportunity Costs", "Market"]

Answer 1

Economic Efficiency is the state in which no one can be made better off without making someone else worse off. This economic efficiency is termed as Pareto efficiency.

It involves optimal allocation of economic goods across production and consumption in a way that no change can be made to make someone better off without making someone else worse off.

When the economy is at stage of economic efficiency, any changes which are made in order to assist one entity would harm another.