Efficiency

Question 1

What’s allocative efficiency?

Answer 1

Where the resources used in the production of a good are equal to the perceived value of the good placed by the consumer.

Question 2

What’s the formula for allocative efficiency?

Answer 2

P = MC

Question 3

What’s productive efficiency?

Answer 3

The lowest point on the AC curve

Question 4

What’s x-efficiency?

Answer 4

Being both productively and allocatively efficient

Question 5

What’s static efficiency?

Answer 5

At a given point in time.
AR = MR = AC

Question 6

What’s dynamic efficiency?

Answer 6

Efficiency over time. Use supernormal profits to reinvest in innovation, research and development, and economies of scale.