What does efficient use of resources mean?
Since the resources available in the society are limited relative to demand for them, it therefore makes economic sense if these limited resources are efficiently used. It becomes a problem on how to use these limited available resources efficiently in order to ensure maximum outputs. If maximum output is obtained from limited available resources, we can say that resources were efficiently used. A solution has to be found on how to make factors of production (land, labour, capital arc entrepreneur) more efficient.
Furthermore, welfare economics answers this question because it is the quantity of goods and services enjoyed or consumed by individual that determines how efficient the resources are being used. The higher the volume consumed the higher the resources used and vice versa.
Summarily, an economy enjoys efficient use of resources if it is not possible to increase the production of one good without decreasing the production of another whereas if the production of one good can be increased without decreasing the production another good there is no efficient use of resources = (pareto optimalty).
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