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 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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Other questions in this quiz

2. 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.

3. Which of these is NOT an example of X inefficiency?

  • Adopt inefficient managerial practices
  • Technical economies of scale
  • Employ surplus labour

4. What is static efficiency?

  • Static efficiency occurs in a single time period e.g. efficiency now
  • Static efficiency occurs over time

5. Where does productive efficiency occur?

  • AR=MC
  • AC=MC
  • P=MC

Comments

davidsalter

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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