economic efficiency2 - economic efficiency Efficiency is...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
economic efficiency Efficiency is one of the most important concepts to use in you're A Level Economics course. There are several meanings of the term - but they generally relate to how well an economy allocates scarce resources to meets the needs and wants of consumers. Make sure you know your definitions well, can illustrate them using appropriate diagrams and can apply them to particular situations Static Efficiency Static efficiency exists at a point in time and focuses on how much output can be produced now from a given stock of resources and whether producers are charging a price to consumers that fairly reflects the cost of the factors of production used to produce a good or a service. There are two main types of static efficiency Allocative Efficiency When consumers are willing to buy some products or services they always consider the value of those products and services. That means they evaluate the resources used up in production to the price they have to pay for that product. It they place the price equals the resource, allocative
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

economic efficiency2 - economic efficiency Efficiency is...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online