ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -To be productively efficient means the economy must be producing on its production possibility frontier. (i.e. it is impossible to produce more of one good without producing less of another).

Detailed explanation-2: -Production efficiency is an economic term describing a level at which an economy or entity can no longer produce additional amounts of a good without lowering the production level of another product. This happens when production is reportedly occurring along a production possibility frontier (PPF).

Detailed explanation-3: -Productive efficiency is a point at which the economy or a business entity can produce the maximum quantity of goods. This is achieved by strategic allocation of finite resources-capital, labor, equipment, material, technology, and energy.

Detailed explanation-4: -Productive efficiency is a situation where firms seek the best combination of inputs to lower their costs of production. Allocative efficiency means that economic resources are distributed in a way that produces the highest consumer satisfaction relative to the cost of inputs.

Detailed explanation-5: -Productive efficiency occurs when a firm is combining resources in such a way as to produce a given output at the lowest possible average total cost. Costs will be minimised at the lowest point on a firm’s short run average total cost curve.