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Productive efficiency
is when resources are used the best way to produce a given output. So that means output is produced at the lowest cost. When this efficiency increases it means that, for example, each farm can produce more apples than before.
Allocative efficiency
is when resources are used in the way consumers wish for them to be. this is where MB=MC. If consumers want 5000 apples and 8000 Oranges, and each farm produces 1000 pieces of fruit, then there will be 5 farms producing apples and 8 producing Oranges
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ProfessorProductive efficiency
is when resources are used the best way to produce a given output. So that means output is produced at the lowest cost. When this efficiency increases it means that, for example, each farm can produce more apples than before.
Allocative efficiency
is when resources are used in the way consumers wish for them to be. this is where MB=MC. If consumers want 5000 apples and 8000 oranges, and each farm produces 1000 pieces of fruit, then there will be 5 farms producing apples and 8 producing oranges
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What is the difference between allocative and technical efficiency?
no difference
Difference between technical efficiency and economic efficiency?
technical efficiency is related to change in output due to change in input and economic efficiency refers to a number of related concepts.
Does greater competition lead to greater efficiency?
Yes. Greater competition between firms/countries/... makes the productive capacity rise and will reduce costs. The rise in the productive capacity is mainly achieved by investing in new capital goods (or replacing the old ones). Of course this will reduce the labor needed (so less costs) and will increase efficiency in the end.
What is difference between effectiveness and efficiency and why?
effectiveness refers to the ability to produce the desired results. efficiency refers to the correctness of the produced result ex; effectiveness is like making an engine of high performance and efficiency is like the extent to which it works and reach the goal of the manufacture
Difference between efficiency and productivity?
In economics, efficiency and productivity relate to the making of products, both goods and services. Productivity represents the amount of output compared to the effort put into the production of that good. Efficiency on the hand means the amount of time spent in doing the same thing.
