Explain to your boss how technological advance increases productive efficiency and allocative efficiency.

Expert Solution

Technological advances increase both allocative efficiency and productive efficiency.

In simple words, allocative efficiency refers to the economic situation in which the goods and services are produced according to the preferences of consumers. Productive efficiency is maximized when goods and services are produced in a way that the marginal benefit of the last unit of each good provides a marginal benefit equal to the marginal cost of production. Technological advances help in product innovation which helps in producing goods and services according to the preference of the consumers.

Productive efficiency refers to the situation in which an economy cannot produce more of one good without reducing the production of another good. Therefore, in productive efficiency, all resources are fully employed to their best use. Technology helps in process innovation, which increases productivity i.e. technology enables the production of more goods and services using a lower level of inputs. Technological innovation helps in reducing the average total cost.

Rahul Sunny answered 2 years ago

1) Define productive efficiency. Does productive efficiency imply allocative efficiency? Explain. Productive efficiency is a situation...

1) Define productive efficiency. Does productive efficiency imply allocative efficiency? Explain. Productive efficiency is a situation in which the economy could not produce any more of one good without sacrificing production of another good. In other words, productive efficiency occurs when a good or a service is produced at the lowest possible cost. Productive efficiency can be defined as producing goods and services for the lowest cost. Productive efficiency does not imply allocative efficiency because a firm or an industry...

Which of the following statements is true about productive and allocative efficiency? Productive efficiency and allocative...

Which of the following statements is true about productive and allocative efficiency? Productive efficiency and allocative efficiency can only occur together; neither can occur without the other. Productive efficiency can only occur if there is also allocative efficiency. Society can achieve either productive efficiency or allocative efficiency, but not both simultaneously. Realizing allocative efficiency implies that productive efficiency has been realized. Select which of the statements below aretrue. Both pure and monopolistically competitive firms do not need to advertise their...

In monopolistically competitive markets, neither allocative nor productive efficiency is realized" explain.

Question A2 a) What is the relevance of productive and allocative efficiency to the growth process?...

Question A2 a) What is the relevance of productive and allocative efficiency to the growth process? Explain b) The achievement of full employment is a sufficient condition for the achievement of economic growth. Evaluate.

Explain how, in the absence of market failures, efficiency as part of allocative efficiency in consumption...

Explain how, in the absence of market failures, efficiency as part of allocative efficiency in consumption is achieved. Explain, in the absence of market failures, efficiency in production (as part of allocative efficiency) is achieved Explain, and support graphically, the Coase theorem and specify the conditions necessary for it to hold

2. Of the 4 markets discussed, which market structure can achieve allocative and productive efficiency in...

2. Of the 4 markets discussed, which market structure can achieve allocative and productive efficiency in the long run 3. Which market structure can have both homogeneous and differentiated products 4. Describe the characteristics of a pure monopoly 5. What are the benefits of monopolistic competition? 6. Please explain how shut-down rule is applied. 7. Discuss the major barriers to entry into an industry

Briefly explain the difference between production efficiency and allocative efficiency. Define production possibilities frontier in your...

Briefly explain the difference between production efficiency and allocative efficiency. Define production possibilities frontier in your answer. Define the law of demand and discuss the different factors/rationales that drive the relationship between price and quantity demanded. Also discuss the difference between quantity demanded and demand. Define the law of supply. Interpret what a single point on the supply curve means. Explain why the supply function has quantity on the left hand side and why the when you plot the supply...

Question

Explain to your boss how technological advance increases productive efficiency and allocative efficiency.

Solutions

Expert Solution

Related Solutions