CHAPTER 54 EFFICIENCY Flashcards Preview

EDEXCEL THEME 3 ECONOMICS > CHAPTER 54 EFFICIENCY > Flashcards

Flashcards in CHAPTER 54 EFFICIENCY Deck (7)
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1
Q

Allocative or economic efficiency

A

Occurs when scarce resources are used to produce a bundle of goods which satisfies consumer preferences and maximises their welfare.

2
Q

Dynamic efficiency

A

Occurs when resources are allocated efficiently over time.

3
Q

Productive efficiency

A

Achieved when production is achieved at lowest average cost.

4
Q

Static efficiency

A

Occurs when resources are allocated efficiently at a point in time.

5
Q

Technical efficiency

A

Achieved when a given quantity of output is produced with the minimum number of inputs.

6
Q

Welfare economics

A

The study of how an economy can best allocate resources to maximise the utility or economic welfare of its citizens.

7
Q

x-inefficiency or organizational slack

A

Inefficiency arising because a firm or other productive organisation fails to minimise its average costs of production at a given level of output.