0
Allocative efficiency is the particular mix of goods and service most highly valued by society (minimum-cost production assumed). True or False?
MrAndyProcter
True
Wiki User
∙ 8y ago
Add your answer:
Earn +20 pts
What is allocative efficiency?
It is the particular mix of goods and service most highly valued by society (minimum-cost production assumed).
To realize full production a society must achieve what?
Both allocative and productive efficiency
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 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.
Why do you have to study pure competition if it has never existed?
produces ideal results in terms of low-cost production and allocative efficiency, and can be used as a basis of comparison.
What is allocative efficiency?
It is the particular mix of goods and service most highly valued by society (minimum-cost production assumed).
To realize full production a society must achieve what?
Both allocative and productive efficiency
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 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.
Why do you have to study pure competition if it has never existed?
produces ideal results in terms of low-cost production and allocative efficiency, and can be used as a basis of comparison.
What is productive efficiency?
It is the production of any particular good in the least costly way.
Productive efficiency is the production of any particular good in the least costly way. True or False?
True
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.
What is efficiency level?
Trophic level efficiency is the ratio of production of one trophic level to the production of the next lower trophic level. This efficiency is never high.
Define optimal efficiency How is optimal efficiency achieved in production?
Optimal efficiency is a term used to describe the condition when a production is producing the best it can with what it has at the lowest cost possible. It is achieved in production by taking all of the production's waste product and dividing the waste product by the overhead costs. A sum of zero is the optimal efficiency.
Importance of mobility of factors of production?
emphasise on efficiency of production in a firm
What decisions affect production efficiency?
All four of the decisions must be made: What goods will be produced?How will production occur?How much should be produced?Who will be the recipients?All are decisions that influence production efficiency.
