Efficiency - A2 Economics OCR

All the types of efficiency that are relevant to the A2 Transport exam. 

P - price 

MC - marginal cost 

MR - marginal revenue 

AC - average cost 

AR - average revenue 

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  • Created by: Jade
  • Created on: 01-12-12 11:37

1. What is allocative efficiency?

  • Allocative efficiency is where firms are achieving economic efficiency
  • Allocative efficiency is when scarce resources are used in a way that maximises consumer satisfaction.
  • Allocative efficiency is where firms are maximising output from given inputs.
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2. What is productive efficiency?

  • Productive efficiency is where firms are maximising output from given inputs.
  • Productive efficiency is when scarce resources are used in a way that maximises consumer satisfaction.
  • Productive efficiency is where firms are operating at the lowest point on the MR curve

3. Allocative efficiency does not apply to which market structure?

  • Monopolistic competition
  • Perfect competition
  • Monopolies
  • Oligopoly

4. Where does productive efficiency occur?

  • AR=MC
  • AC=MC
  • P=MC

5. What is X inefficiency?

  • X inefficiency occurs when there is little incentive for firms to want to be efficient.
  • X inefficiency occurs when a firm uses more inputs than are necessary for a given level of output. Associated with lack of competition e.g. within a monopoly
  • X inefficiency occurs when a market fails to deliver the amount of products and services most wanted by consumers
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Comments

davidsalter

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A set of 10 questions on efficiency. Take a break from reading by testing yourself. Could show areas for further study.

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