Define productive efficiency. Does productive efficiency imply ...

[Anajune7]

Define productive efficiency. Does productive efficiency imply allocative efficiency? Explain.
 
  What will be an ideal response?

Question 2

An decrease in supply is caused by a decrease in the price of the product.
 
  Indicate whether the statement is true or false

[yahahah24021]

Answer to Question 1

Productive efficiency is an efficiency criterion that describes a situation in which goods and services are produced at the lowest possible cost. It does not imply allocative efficiency which is a criterion associated with producing goods and services that consumers value most. For example, a manufacturer may be able to produce typewriters at the lowest possible cost of 200, but this does not necessarily mean that consumers are willing to pay 200 for a typewriter.

Answer to Question 2

FALSE

[Anajune7]

Correct answers!

[yahahah24021]

Great! Please up vote