Topic 4.1 Production and Productivity Flashcards
1
Q
Production
A
Production converts inputs/factors of production into a final output
2
Q
Productivity
A
Output per unit per period of time
3
Q
Labour productivity
A
Output per worker per period of time
4
Q
Allocative efficiency
A
Where demand = supply and maximises social welfare.
5
Q
Productive efficiency
A
Maximising output at the lowest possible average cost
6
Q
Dynamic efficiency
A
Dynamic efficiency refers to an economy’s or firm’s ability to adapt and improve its productivity through innovation and new technology which decreases their long-run costs.
- Consumer: leads to new, innovative products
- Producer: Lower costs over time, competitive advantage.
7
Q
X-efficiency
A
Production with no waste
