Learn vocabulary, terms, and more with flashcards, games, and other study tools. Production efficiency may also be referred to as productive efficiency. Productive efficiency similarly means that an entity is operating at maximum capacity. All available resources are employed in production. 2) Which of the following are true about productive efficiency? Productivity is generally regarded as a measure of outputs divided by inputs. When a firm is operating at the lowest point of their average cost curve in the short or the long run. I. The mix of goods produced and their distribution to consumers maximizes customer satisfaction. In a market-oriented economy with a democratic government, the choice will involve a mixture of decisions by individuals, firms, and government. A firm is said to be productively efficient when it is producing at the lowest point on the short run average cost curve (this is the point where marginal cost meets average cost). Productive efficiency . The study of economics does not presume to tell a society what choice it should make along its production possibilities frontier. Allocative efficiency . Start studying 3.1 Food supply, Plant growth and Productivity. While efficiency is all about working smarter, to get more out of less, productivity nothing but increasing the overall yield, and this is possible by raising the performance level, to achieve greater results. Productive efficiency and short-run average cost curve. Efficiency. could not produce any more of one good without sacrificing production of another good and without improving the production technology. Economic efficiency - key concept summary. Located in Lincoln NH near Loon Mountain. IV. In this case, the firm will be allocatively efficient because at Q1 P=MC. III. 2. Allocative efficiency occurs where P = MC. Penguin Ski Club of New Hampshire. When scarce resources are allocated according to consumer preferences at a price equal to marginal cost . tutor2u partners with teachers & schools to help students maximise their performance in important exams & fulfill their potential. Productive efficiency is closely related to the concept of technical efficiency. This is because firms produce at the lowest point on the AC. All of the activities that you get done in a day may be considered your output and the time you put into them are your inputs. Dynamic efficiency Workers are well-paid. Productive Efficiency. Knowing the difference between productivity and efficiency will help you understand the how the performance of the company is measured. Efficiency. This occurs on the lowest point of the AC curve. X efficiency. Menu and widgets Efficiency is a measure of how well you do those things. II. This happens at Q1. Productivity. 3. Points on the PPF curve are the only ones that achieve "productive efficiency". 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