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 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
  • X inefficiency occurs when there is little incentive for firms to want to be efficient.
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Other questions in this quiz

2. What is economic efficiency?

  • Economic efficiency occurs when scarce resources are used in a way that maximises consumer satisfaction.
  • 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.

3. 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.

4. 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.

5. Improving products helps a firm gain or at least retain ______ in the face of competition

  • Revenue
  • Market share
  • Profit
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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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