Difference between productive and allocative efficiency, Macroeconomics

Assignment Help:

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)

 


Related Discussions:- Difference between productive and allocative efficiency

Describe about price level and time, Q. Describe about Price level and time...

Q. Describe about Price level and time? We are hardly interested in the value of price level at a certain point in time. What we are interested in is percentage change in the p

GDP AND PRICE LEVEL IN SHORT RUN, #question.WHAT IS GDP AND DIFFERENT PRICE...

#question.WHAT IS GDP AND DIFFERENT PRICE LEVEL IN SHORT RUN?.

How commercial banks create money, How commercial banks "create money" ...

How commercial banks "create money" Commercial banks obviously cannot influence the amount of currency in the economy or the monetary base, since they are not allowed to print

Review of related economic theory, Oil price shocks lead to large adverse s...

Oil price shocks lead to large adverse supply shocks in the macroeconomy, infer Dornbusch et al (2008) who define an adverse supply shock as; ‘one that shifts the aggregate supply

Exante real interest rate, The exante real interest rate is based on _____ ...

The exante real interest rate is based on _____ inflation, while the ex post real interest rate is based on _____ inflation. A) expected; actual B) core; actual C) actual;

Overnight interest rates targets and money supply, Q. Overnight interest ra...

Q. Overnight interest rates targets and money supply? There are many ways to explain the significant connection between overnight interest rate target and money supply. We will

Project topics, i want a project topics in macroeconomics

i want a project topics in macroeconomics

Decay toothbrush and decay fighter toothbrush, The Stop decay company sells...

The Stop decay company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decay fighter, redu

Inflation in sweden, Inflation in Sweden Figure Inflation in Swed...

Inflation in Sweden Figure Inflation in Sweden 1830 - 2010. Source: SCB. There are four aspects which are interesting when we look at inflation data for Sweden

Economic cost of your business annually, Suppose that you decide to leave y...

Suppose that you decide to leave your current job(with a salary of $60,000) to start your own business in a building (with a market value of $400,000) you already own. You pay $45,

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd