In economics, the most effective use of resources that maximizes consumer and producer surplus is referred to as __________ efficiency.

In economics, the term you are looking for is "allocative efficiency. " This means that resources are distributed in a way that maximizes the total benefit to society, which includes both consumer and producer surplus. Consumer surplus is the extra benefit consumers get when they pay less than what they are willing to pay, while producer surplus is the extra benefit producers receive when they sell at a higher price than their minimum acceptable price. For example, if a bakery sells cupcakes for $3 each, but some customers would have paid $5, the difference of $2 represents consumer surplus. When both types of surplus are maximized, it means the resources are being used in the best way possible for everyone involved.