1. What is economic efficiency?
- Economic efficiency occurs in a market when both allocative and productive efficiency are achieved.
- Economic efficiency occurs when a firm uses the right amount of inputs that are necessary for a given level of output.
- Economic efficiency occurs when scarce resources are used in a way that maximises consumer satisfaction.
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2. What is allocative 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.
- Allocative efficiency is where firms are achieving economic efficiency
3. Allocative efficiency does not apply to which market structure?
- Monopolistic competition
- Perfect competition
4. What is true of allocative efficiency?
- The price paid by the consumer represents the price the supplier is willing to sell for
- The price paid by the consumer represents the true cost of producing the last unit
- The price paid by the consumer represents the lowest cost of producing the last unit
5. What is dynamic efficiency?
- Dynamic efficiency is improvements in products, processes and productivity over time by exploiting economies of scale or successful investment in research and development. In short, efficiency over time.
- Dynamic efficiency is the creative work undertaken to apply scientific and technological innovations to products and processes.
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