00:01
Hey everyone, today we're solving problem 21 from chapter 2 the textbook, which deals with thinking about the drawbacks of allocative efficiency.
00:09
All right, so in order to understand this problem, we first need to define allocated efficiency, which from chapter 2 we know is when the particular mix of goods being produced is most desirable by society.
00:33
So one of the things to note about this definition is, you know, what is technically most desirable? now, that is a very, like, controversial question to consider and to answer.
00:44
So that'll also deal with the part of, like, answering this question.
00:49
So thinking about why it's particularly wasteful, well, allocative efficiency is also wasteful along with production, productive efficiency, because society is not using the resources in the way that they most desire...