Practice prompt · Q:economics-and-market-foundations/distinguish-efficiency-criteria-001

Distinguish three efficiency questions

Check whether the learner separates a broad economic efficiency judgment from productive boundary use and allocative selection under a stated criterion.

Updated Aug 7, 2026 Review due Nov 7, 2026

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A team labels a fully utilized daily production plan “efficient” and treats that word as a complete recommendation. Which response best distinguishes the questions hidden by that label?

Choose the best answer. a Productive efficiency asks whether more of one output requires less of another; allocative efficiency asks which feasible mix best serves a stated criterion; broader economic efficiency compares relevant benefits and sacrifices under a declared scope. b Any point using every available hour is productively, allocatively, and economically efficient by definition. c Allocative efficiency can be determined from output quantities alone because values, prices, rights, and affected parties are outside economics.

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Answer: a

Choice a. State which efficiency question is being asked, the boundary and counterfactual, the allocative criterion, relevant consequences, and the scope of omitted parties and costs.