What term refers to the production and consumption of goods and services at the best levels for society?

The term that refers to the production and consumption of goods and services at the best levels for society is economic efficiency. Economic efficiency occurs when resources are allocated in a way that maximizes the total benefit to society. This implies that goods and services are produced at the lowest possible cost and are distributed to those who value them the most, ensuring that societal welfare is optimized.

When economic efficiency is achieved, it means that no one can be made better off without making someone else worse off, which is also known as Pareto efficiency. This concept is critical in economics because it emphasizes an ideal allocation of resources that contributes to overall societal welfare, rather than merely focusing on individual benefits or potential market failures.

In contrast, market failure occurs when the free market fails to allocate resources efficiently on its own, which can lead to underproduction or overproduction of goods and services. Economic growth refers to an increase in the production of goods and services over time, but it does not necessarily imply efficiency. Consumer surplus reflects the difference between what consumers are willing to pay for a good or service versus what they actually pay, and while it can be an indicator of economic welfare, it does not fully encapsulate the concept of optimal production and consumption levels for society.