Economics and Efficiency

Front

What does the study of economics not presume to tell a society?

Back

The study of economics does not presume to tell a society what choice it should make along its production possibilities frontier.

Front

In a market-oriented economy with a democratic government, what does the choice involve?

Back

The choice involves a mixture of decisions by individuals, firms, and government.

Front

What can economics point out regarding choices?

Back

Economics can point out that some choices are unambiguously better than others, based on the concept of efficiency.

Front

What is the everyday usage of the term 'efficiency'?

Back

Efficiency refers to lack of waste. An efficient machine operates at lower cost because it is not wasting energy or materials.

Front

What is the difference between an inefficient and an efficient organization?

Back

An inefficient organization operates with long delays and high costs, while an efficient organization meets schedules, is focused, and performs within budget.

Front

What can the production possibilities frontier illustrate?

Back

The production possibilities frontier can illustrate two kinds of efficiency: productive efficiency and allocative efficiency.