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Allocative and productive efficiencies are theoretical concepts in economics. Allocative efficiency is achieved in an economy when the distribution or apportionment of resources produces the greatest utility for consumers through its combination of products. For example, and for the sake of simplicity, envision an economy with two products: Pizza and robots. In an allocatively-efficient economy, businesses are producing the right amount of each product to make consumers happy. Productive efficiency, on the other hand, is when an economy is using all of its resources efficiently, producing the greatest output for the smallest input. Productive efficiency, on a production possibility frontier, occurs on any points along the curve.
Wiki User
∙ 13y ago
Wiki User
∙ 11y agoallocative efficiency is the collected efficiency from different sources& which is used to improve productive efficiency
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Which of the following statements are true about productive and allocative efficiency society can achieve either productive efficiency or allocative efficiency but not simultaneously?
society can achieve either productive efficiency or allocative efficiency, but not both simultaneously
What are the techniques of economic efficiency in health care?
allocative efficancy productive efficancy
To realize full production a society must achieve what?
Both allocative and productive efficiency
What is meant by an efficient market equilibrium?
When there is allocative and productive efficiency, there is an efficient market equilibrium, allocative efficiency is when the products that are most wanted are produced, this is achieved when price equals marginal cost, productive efficiency is achieved when the firm is producing on the lowest point on the lowest average cost curve, this is also called the point of technical efficiency, both allocative and productive efficiency lead to an optimum allocation of resources and economic efficiency is achieved, though, this is thought to exist only in a perfectly competitive market and is lacking in other markets because monopolies and oligopolies usually have their prices above marginal cost and that is not an efficient allocation of resources and because other markets may lack the incentive to produce at the lowest cost
How does competition in a market affect allocative and productive efficiency?
A competitive market, firms act with their benefit at heart. If a firm is producing at productive efficiency, it produces goods at a relatively low expenditure, it can sell at low prices and hence compete well in the market.
Which of the following statements are true about productive and allocative efficiency society can achieve either productive efficiency or allocative efficiency but not simultaneously?
society can achieve either productive efficiency or allocative efficiency, but not both simultaneously
What are the techniques of economic efficiency in health care?
allocative efficancy productive efficancy
To realize full production a society must achieve what?
Both allocative and productive efficiency
What is meant by an efficient market equilibrium?
When there is allocative and productive efficiency, there is an efficient market equilibrium, allocative efficiency is when the products that are most wanted are produced, this is achieved when price equals marginal cost, productive efficiency is achieved when the firm is producing on the lowest point on the lowest average cost curve, this is also called the point of technical efficiency, both allocative and productive efficiency lead to an optimum allocation of resources and economic efficiency is achieved, though, this is thought to exist only in a perfectly competitive market and is lacking in other markets because monopolies and oligopolies usually have their prices above marginal cost and that is not an efficient allocation of resources and because other markets may lack the incentive to produce at the lowest cost
How does competition in a market affect allocative and productive efficiency?
A competitive market, firms act with their benefit at heart. If a firm is producing at productive efficiency, it produces goods at a relatively low expenditure, it can sell at low prices and hence compete well in the market.
What is the difference between allocative and technical efficiency?
no difference
What is an optimum resource allocation?
Optimum allocation is when productive and allocative efficiency co-exist. Productive efficiency is achieved when when products are made with the least possible use of the resources, i.e, by incurring lowest possible costs in producing them Allocative efficiency is achieved when the combination of products produced provide consumers the greatest possible satisfaction, i.e, goods which are most wanted are produced When both these elements are present, there is also economics efficiency. This means that resources are used in the best way possible, i.e, producing the goods which are most wanted with the least possible use of resources
What does the term 'allocative efficiency' refer to?
Allocative efficiency is the concept in economics where manufacturers and service providers only produce those goods and services which are in high demand and the most desirable to the consumer.
What is optimum allocation?
Optimum allocation is when productive and allocative efficiency co-exist. Productive efficiency is achieved when when products are made with the least possible use of the resources, i.e, by incurring lowest possible costs in producing them Allocative efficiency is achieved when the combination of products produced provide consumers the greatest possible satisfaction, i.e, goods which are most wanted are produced. When both these elements are present, there is also economics efficiency. This means that resources are used in the best way possible, i.e, producing the goods which are most wanted with the least possible use of resources Tried using simple English. Hopefully it helps. Thx
Discuss whether economic efficiency as described in text books is likely to be able to be achieved in practice?
Economic efficiency is said to be achieved when both the conditions of productive and allocative efficiency are fulfilled. Productive efficiency arises when productin is carried out at lowest cost, i.e, at minimum average cost. On the other hand allocative efficiency arises when resources are allocated to teh production of those goods and services which consumers demand the most. This efficiency arises when price is equal to teh marginal cost of the good or service. Economic efficiency exists in the idealistic perfect market model of perfect competition. However this market structure barely exists. Imperfections exist in all markets. Moreover even if a market is eficient there may be a misallocation of resources which does not give rise to wellbeing of the economy. Hence economic efficiency does not necessarily lead to welfare economics.
How do you achieve allocative efficiency?
Allocative efficiency is an output level where the price equals the marginal cost of production. This is because the price that consumers are willing to pay is equivalent to the marginal utility that they get. Therefore the optimal distribution is achieved when the marginal utility of the good equals the marginal cost.
What is allocative efficiency?
It is the particular mix of goods and service most highly valued by society (minimum-cost production assumed).
