Asked by Shayal Shiwani on Jun 13, 2024
Verified
How does technological advance enhance economic efficiency? Distinguish between its effects on productive efficiency and allocative efficiency.
Economic Efficiency
The optimal distribution of resources to meet the needs and wants of a society, minimizing waste and maximizing value.
Productive Efficiency
A situation in which a firm or economy produces goods at the lowest possible cost, utilizing all available resources efficiently.
Allocative Efficiency
A state of the market where resources are allocated in a way that maximizes total consumer and producer surplus.
- Examine how technological advances contribute to economic efficiency, including both productive and allocative efficiency.
Verified Answer
GB
gazal babbarJun 14, 2024
Final Answer :
Technological advance contributes significantly to economic efficiency. It improves productive efficiency by increasing the productivity of inputs and by reducing average total costs. It enhances allocative efficiency by giving society a more preferred mix of goods and services.
Learning Objectives
- Examine how technological advances contribute to economic efficiency, including both productive and allocative efficiency.