Economic Efficiency Concepts

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What is the concept of allocative efficiency in economics?

Allocative efficiency is when markets use scarce resources to make goods and services and satisfy the needs and wants of society.

Define dynamic efficiency in the context of resource allocation.

Dynamic efficiency is when all resources are allocated, adapted and improved over time.

Explain the concept of inter-temporal efficiency.

Inter-temporal efficiency refers to an entity's ability to maintain the right balance between resources used for the present and the future.

What does productive efficiency aim to achieve in an economy?

<p>Productive efficiency aims to produce the largest possible products and services from the available resources, using the least cost production method.</p> Signup and view all the answers

How does inter-temporal efficiency differ from allocative efficiency?

<p>Inter-temporal efficiency focuses on balancing resources between present and future, while allocative efficiency is about utilizing resources to meet current needs and wants.</p> Signup and view all the answers