--%>

Distinguish between allocative efficiency and productive

Distinguish between allocative efficiency and productive efficiency. Give an illustration of achieving productive, but not allocative, efficiency?

E

Expert

Verified

Allocative efficiency means that resources are being used to produce the goods and services most wanted by society. The economy is then located at the optimal point on its production possibilities curve where marginal benefit equals marginal cost for each good. Productive efficiency means the least costly production techniques are being used to produce wanted goods and services. Example: manual typewriters produced using the least-cost techniques but for which there is no demand.

   Related Questions in Business Economics

  • Q : Illustrate the advantage of corporate

    Illustrate the advantage of corporate form of organization?

  • Q : Economics as a science Economics as a

    Economics as a science:We no longer ask the problem whether economics is an art or a science. Science is a systematized body of knowledge. Merely as physics and chemistry are sciences, econo

  • Q : Government expenditures on goods and

    Explain Government expenditures on goods and services and transfer payments?

  • Q : Organization of employees-Division of

    ‘Mama’ Jean consists of one employee bake crumbly, graham cracker crusts at Mama’s Home-Pies, whereas the other stirs gooey, hot, apple filling. Her staff is organized in accord with a/an: (1) Task management system. (2) Division of labor. (3) Compar

  • Q : Explaination on Economical Management

    ECONOMICS Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the ex

  • Q : High-convexity portfolios outperform

    An important drawback of "traditional yield spread analysis" is the "failure to take into account future interest rate volatility that would affect the expected cash flow" of a fixed income security. How does option adjusted spread analysis correct for the "failure" of traditional yield spread analy

  • Q : Tax revenues to reduce rate of inflation

    Explain how government might manipulate its expenditures and tax revenues to reduce rate of inflation?

  • Q : Explain the foundation of economics

    Explain the foundation of economics where society’s material wants are unlimited?

  • Q : Resource markets in simple circular

    Can someone help me in finding out the right answer from the given options. In resource markets in a simple circular flow model, house-holds exchange their _________ for _________. (1) Resources | income. (2) Goods | profits. (3) Labor | goods. (4) Devotion | enlighte

  • Q : Illustrate several theories about

    Illustrate several theories about causation?