Efficenecy Flashcards
X-inefficiency
A firm’s inability to fully utilize its resources so ac are higher.
Allocative efficiency
Resources are distributed to goods and services that consumers want( they procure what is demanded). Where P=MC.
Productive efficiency
Where a firm gets the lowest possible cost to make a product with there current capital. Where AC=MC.
What is dynamic effciency
A firm matching the changing demand of a market as its constantly innovating over time.
What’s utility
The value and satisfaction a consumer gains from consuming a product or service
What marginal utility?
Benefit a consumer gains from consuming one additional unit of product or service
What are the 4 types of efficiency
1.Productive efficiency
2.Allocative efficiency
3.x-inefficiency
4.Dynamic efficiency