Types of efficiency

0.0(0)
studied byStudied by 0 people
GameKnowt Play
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/4

flashcard set

Earn XP

Description and Tags

Economics

A-Level Economics

AQA

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

5 Terms

1
New cards

Allocative efficiency (definition and when it occurs)

Optimal distribution of resources, when Price/AR = MC

2
New cards

Productive efficiency (definition and when it occurs)

When output is maximised and cost is minimised, lowest point on AC curve / any point of PPF (Full exploitation of economies of scale)

3
New cards

X - inefficiency (definition and when it occurs)

when a firm lacks the incentive to control costs so there is waste of resources (e.g. monopolies), at any point on the AC curve

<p>when a firm lacks the&nbsp;incentive to control costs so there is waste of resources (e.g. monopolies), at any point on the AC curve</p>
4
New cards

Dynamic efficiency (definition and when it occurs)

productive efficiency of a firm in the long run, when a firm re-invests profits to keep being efficient, any point on LRAC

<p>productive efficiency of a firm in the long run, when a firm re-invests profits to keep being efficient, any point on LRAC</p>
5
New cards

Static Efficiency (definition and when it occurs)

Occurs in the SR, when a firm is either productively or allocatively efficient