Answer to Question 1
Answer: C
Explanation: Effectiveness is concerned with ends as opposed to means. Being effective means getting the job done (attaining goals), while being efficient is concerned with how the job got done and such things as cost minimization. While effective operations usually feature smart management, the two are not necessarily synonymous.
Answer to Question 2
Answer: A
Explanation: Efficiency must involve reducing the input-to-output ratio in some way. Cutting the amount of labor reduces the amount of input and so marks an increase in efficiency. Cutting the price does not affect the amount of resources and labor that go into the product, nor does it improve the product itself, so it is not an efficiency measure. Increasing sales and advertising similarly do not change the input-output ratio so they do not increase efficiency.
