Principles of Microeconomics / Unit 1 MIC 0025 short lesson, about 20 seconds
Productive and Allocative Efficiency
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The idea
Productive efficiency means no more of one good without less of the other: every frontier point. Allocative efficiency is the one frontier point society values most.
In practice
Idle workers or idle factories put an economy inside the curve.
Where people slip
An economy can sit inside the curve while fully employed if resources go where they lack comparative advantage. Both terms return in unit seven.
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