Difference between productive and allocative efficiency, Macroeconomics

Explain the difference between productive and allocative ( economic ) efficiency.

  • Explanation of productive efficiency, e.g. output at AC minimum
  • Define to the effect that this shows that all factors (fixed and variable) are being utilised to the utmost efficiency when average costs are at the lowest point
  • Definition of allocative efficiency, e.g. P = MC
  • Explanation that allocative efficiency means that welfare is maximised - the firm is producing the last possible unit since the market price means that there is a demand for it at that price
  • illustrating both concepts using a unit cost picture (PCM)

 

Posted Date: 7/11/2013 5:23:49 AM | Location : United States







Related Discussions:- Difference between productive and allocative efficiency, Assignment Help, Ask Question on Difference between productive and allocative efficiency, Get Answer, Expert's Help, Difference between productive and allocative efficiency Discussions

Write discussion on Difference between productive and allocative efficiency
Your posts are moderated
Related Questions
why is international trade important for south Africa

how to calculate consumption from saving and tax

Assuming that the expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturity. Next, plot the resulting yield c

Each day millions of Americans purchase millions of goods and services. These goods and services are generally readily available, as long as you have the necessary money to purchas

You are the manager of an organization in America that distributes blood to hospitals in all 50 states and the District of Columbia. A recent report indicates that nearly 50 Americ

New technology was just invented that decreases the cost of planting and harvesting soybeans: show the effect of this on the soybean market. Show the effect of that on the tofu mar

A. What are the major differences between capitalism, communism, and socialism? B. Discuss the three major economic indicators and how they are indicative of our current economi

It's been three weeks since you started working for BioMed and there's still no trace of Selwyn. That means you're still BioMed's resident economic expert. Harry the CEO was ple


What is the meaning of Deindustrialisation Deindustrialisation or structural decline of many manufacturing industries along with activities like coal mining is associated with