An economy is efficient when:

A) the problem of scarcity is eliminated.
B) output is distributed equitably.
C) all opportunities to make some people better off without making other people worse off have been taken.
D) all opportunities to make some people worse off without making other people better off have been taken.

Efficiency in an economy is achieved when all possible opportunities to make some people better off without making others worse off have been utilized. This means that resources are allocated optimally and no further increase in total benefit is possible without causing harm to someone else. Eliminating the problem of scarcity is impossible, and equitable distribution of output does not necessarily lead to efficiency. Option D is incorrect as it implies a negative outcome for some individuals in the economy.