Types of Effiency Flashcards
1
Q
What are the three types of efficiency
A
Productive
Allocative
Pareto
2
Q
What is productive efficiency?
A
The ability of a firm to produce the maximum levels of goods and services based on its factors or production and scarce resources.
3
Q
What is pareto efficiency?
A
The idea that nobody can be better off without someone else being worse off. Anywhere on the PPF is pareto efficient
4
Q
What is allocative efficiency?
A
When what is being produced is satisfying customers wants, we cannot see allocative efficiency on a PPF curve because we cannot see consumer demand.
