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Stels [109]
2 years ago
7

Distinguish between production efficiency and allocative efficiency. ​_______ efficiency occurs when we produce goods and servic

es at the lowest possible cost. ​_______ efficiency occurs when goods and services are produced at the lowest possible cost and in the quantities that provide the greatest possible benefit.
Business
2 answers:
Troyanec [42]2 years ago
5 0

Answer: Production efficiency, Allocative efficiency

Explanation:

ludmilkaskok [199]2 years ago
5 0

Answer:

<u>PRODUCTION</u> efficiency occurs when we produce goods and services at the lowest possible cost. ​

<u>ALLOCATIVE</u> efficiency occurs when goods and services are produced at the lowest possible cost and in the quantities that provide the greatest possible benefit.

Explanation:

Production efficiency basically refers to an economy producing along its production possibilities frontier (PPF). This means that it cannot produce any more units, since it is using all it available resources.

Allocative efficiency refers to an economy producing along its PPF at a point where it is maximizing the benefits obtained. The production of goods will match the combination that consumers need and prefer the most.

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You own factory A and factory B. The next cash flow for each factory is expected in 1 year. Factory A has a cost of capital of 3
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Answer: See Explanation

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Worth of Factory B = $545,000

Therefore, factory A is more valuable than Factory B and Factory B is more risky than Factory A.

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