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What is allocative efficiency and productive efficiency?
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.
Using the circular flow model explain why the value of business output of goods and services equals the income of households?
Answer: The circular flow model is a diagram representing the flow of products and resources between businesses and households in exchange for money payments. Flow must distinguished from stocks. Flows are measured in units per time period - for example, dollars per year. Stock is a quantity measured at one point in time. For example, an inventory of goods or the amount of money in a checking account. Initially, we assume that the economy is composed of only two sector, business and household. In this hypothetical economy the business sector is the sole producer of goods and services and production occurs by hiring the factor of production. The household owns all the factors of production (land, labour, capital and entrepreneur). The flow of factor of production is shown by the flow from the household to the firm. We further assume that household are the sole buyers of goods and services and that they spend their entire income. The upper half of the diagram in Figure 1 represents product markets, in which households exchange money for goods and services produced by firms. The supply arrow in the top loop represents all finished products and the value of services produced, sold, and delivered to consumers. The demand arrow in the top loop shows why the businesses make this effort to satisfy the consuming households. When consumers decide to buy products, they are actually voting with their dollars. This flow of consumption expenditures from households is sales revenues to businesses and expenses from the viewpoint of households. Notice that the box labeled product markets contains a supply and demand graph. Price and quantities in individual markets are determined by the market supply and demand model without government interference. The forces of supply and demand determine the returns to the factors, for example, wages and the quantity of labour supplied. The bottom half of the circular flow diagram consists of the factor markets, in which firms demand the natural resources, labour, capital, and entrepreneurship needed to produce the goods and services sold in the product markets. The supply arrow in the bottom loop represents this flow of resources from households to firms, and the demand arrow is the flow of money payments for these resources. These payments also income earned by households in the form of wages, rents, interest, and profits. In the factor market, resources (land, labour and capital) are owned by households and supplied to businesses that demand these factors in return for money payments. Businesses seek profits by supplying goods and services to households through the product markets. Businesses therefore must purchase all resources from the households.
What are the example of scarce resources?
Example of some scarce resources are Oil, Paper, Gasoline and Land etc.
How do people act as a resource for a country?
People act as resources to their country by being productive in their country. Being productive entails a lot, for example producing crops in a large scale and hiring people to work for you. You reduce unemployment and play a role in preventing hyper inflaton because you make a certain product available at a reasonable price. On this regard civil servants are also productive.They usually 'produce' service.
What is an example of a positive shock to aggregate supply?
Good weather leads to an unusually productive harvest for corn farmers.
Which of these could be an example of a money payment made to households by government?
taxes
What are examples of limited resources?
Land is an example of a limited resource because we only have so much of it. Ecologically productive land is even more limited because not all land is arable.
What is allocative efficiency and productive efficiency?
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.
What is a non-productive asset?
it is a type of asset which does not produce any output.. for example TV is non-productive asset if you use it for home viewing only but it may become productive asset if you start using it to make money, like for example in african villages where the owner charges fees for viewing the movies..
What is a non productive asset?
it is a type of asset which does not produce any output.. for example TV is non-productive asset if you use it for home viewing only but it may become productive asset if you start using it to make money, like for example in african villages where the owner charges fees for viewing the movies..
Using the circular flow model explain why the value of business output of goods and services equals the income of households?
Answer: The circular flow model is a diagram representing the flow of products and resources between businesses and households in exchange for money payments. Flow must distinguished from stocks. Flows are measured in units per time period - for example, dollars per year. Stock is a quantity measured at one point in time. For example, an inventory of goods or the amount of money in a checking account. Initially, we assume that the economy is composed of only two sector, business and household. In this hypothetical economy the business sector is the sole producer of goods and services and production occurs by hiring the factor of production. The household owns all the factors of production (land, labour, capital and entrepreneur). The flow of factor of production is shown by the flow from the household to the firm. We further assume that household are the sole buyers of goods and services and that they spend their entire income. The upper half of the diagram in Figure 1 represents product markets, in which households exchange money for goods and services produced by firms. The supply arrow in the top loop represents all finished products and the value of services produced, sold, and delivered to consumers. The demand arrow in the top loop shows why the businesses make this effort to satisfy the consuming households. When consumers decide to buy products, they are actually voting with their dollars. This flow of consumption expenditures from households is sales revenues to businesses and expenses from the viewpoint of households. Notice that the box labeled product markets contains a supply and demand graph. Price and quantities in individual markets are determined by the market supply and demand model without government interference. The forces of supply and demand determine the returns to the factors, for example, wages and the quantity of labour supplied. The bottom half of the circular flow diagram consists of the factor markets, in which firms demand the natural resources, labour, capital, and entrepreneurship needed to produce the goods and services sold in the product markets. The supply arrow in the bottom loop represents this flow of resources from households to firms, and the demand arrow is the flow of money payments for these resources. These payments also income earned by households in the form of wages, rents, interest, and profits. In the factor market, resources (land, labour and capital) are owned by households and supplied to businesses that demand these factors in return for money payments. Businesses seek profits by supplying goods and services to households through the product markets. Businesses therefore must purchase all resources from the households.
How financial institutions affect households and business?
Financial institutions have affected households and businesses by determining who is eligible for a loan. For example, if someone is not approved for a loan, they would be unable to buy a home or a car.
What are the example of scarce resources?
Example of some scarce resources are Oil, Paper, Gasoline and Land etc.
What form of government is where the principal means of production are owned by the government example?
The form of government where the principal means of production are owned by the government is known as socialism. In a socialist system, the government typically controls key industries and resources, aiming to promote equality and distribute wealth more evenly among the population. An example of this is Cuba, where the state owns and operates most of the economy, including healthcare and education.
What is an example of a theocracy government?
One example of a theocracy government is Iran
What other type of productive resource can people be?
People can also be considered a productive resource through their knowledge, skills, and abilities. This human capital is essential for driving innovation, creativity, and productivity in various industries and sectors. By continually developing and investing in human capital, individuals can contribute significantly to economic growth and wealth creation.
What are some capital resources for the lakota?
What is an example of capital resources for lakota
