Efficiencies Flashcards
1
Q
What is allocative efficiency?
A
Optimal distribution of goods and services. Resources are allocated in the most efficient way.
2
Q
What is productive efficiency?
A
Producing goods and services at the lowest possible costs. Occurs on the PPC.
3
Q
What is dynamic efficiency?
A
Productive efficiency of a firm over time. Optimal rate of innovation and investment.
4
Q
Why do governments strive for maximum efficiency?
A
