Explain what is meant by an efficient allocation of resources in an economy and describe the market conditions that must exist to achieve this goal.

MAXIMIZING IN THE MARKETPLACE

L E A R N I N G O B J E C T I V E S

1. Explain what is meant by an efficient allocation of resources in an economy and describe the
market conditions that must exist to achieve this goal.

2. Define consumer and producer surplus.

3. Discuss the relationship between efficiency and equity.