allocative efficiency (1 Viewer)

[timmii]

I was wondering if anyone please has a better definition for "allocative efficiency" than "the price reflecting the marginal price of production"?

Thanks! Good luck for the exams!

 

[spice girl]

isn't it where there is optimal allocation of resources...allocated in a configuration that maximises productivity.

Anyway, teacher's notes: "an improved allocation of resources between industries"

 

[timmii]

Thanks spice girl Thats what i assumed it to be, but the textbook says everything in such a convoluted and overly verbose way...

 

[Minai]

do u have more than one text?
coz i find some texts are better than others in different topics
so its always good to have at least 2 or 3 other texts to get the best out of everything

 

[Bambul]

Just remember they allocate resources:

Technical efficiency - within a single industry
Allocative efficiency - between different industries
Dynamic efficiency - more responsive to changes, ie. better able to adapt

 

[the wigged one]

i thought allocative efficiency occurs when the interplay of market forces govern resource allocation, resulting in a more efficient allocation of resources.
technical efficiency arises as a result of firms decreasing production costs, either through improving the productivity of labour, or through technology.
dynamic efficiecny occurs when firms are able to adapt to changes in teh external or internal economic environment. e.g., the fact that Australia has sustained economic growth of 3.8% despite world growth contracting to 1.7% reflects the increased dynamic efficiency of Australian firms.

 

[Slush Puppy]

er Wigged One, can i call u eco nerd?

nah, they're good definitions, but the poor guy (me bad if ur a girl timii ) only asked for the definition of allocative efficiency.

ah me bored...maybe i should hit the book again

ciao