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In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: [1] Allocative or Pareto efficiency : any changes made to assist one person would harm another.
Distributive inefficiency is often associated with economic inequality. Economic inefficiency refers to a situation where "we could be doing a better job," i.e., attaining our goals at lower cost. It is the opposite of economic efficiency. In the latter case, there is no way to do a better job, given the available resources and technology.
The concept of minimum efficient scale is useful in determining the likely market structure of a market. For instance, if the minimum efficient scale is small relative to the overall size of the market (demand for the good), there will be a large number of firms.
The equation below (in Cobb–Douglas form) is often used to represent total output (Y) as a function of total-factor productivity (A), capital input (K), labour input (L), and the two inputs' respective shares of output (α and β are the share of contribution for K and L respectively). As usual for equations of this form, an increase in ...
In statistics, efficiency is a measure of quality of an estimator, of an experimental design, [1] or of a hypothesis testing procedure. [2] Essentially, a more efficient estimator needs fewer input data or observations than a less efficient one to achieve the Cramér–Rao bound.
Cost-effectiveness analysis (CEA) is a form of economic analysis that compares the relative costs and outcomes (effects) of different courses of action. Cost-effectiveness analysis is distinct from cost–benefit analysis, which assigns a monetary value to the measure of effect. [1]
When expressed as a percentage, the thermal efficiency must be between 0% and 100%. Efficiency must be less than 100% because there are inefficiencies such as friction and heat loss that convert the energy into alternative forms.
GDP per capita vs. 'Economic Energy Efficiency' plotted for the top 40 national economies. An inverse way of looking at the issue would be an 'economic energy efficiency,' or economic rate of return on its consumption of energy: how many economic units of GDP are produced by the consumption of units of energy.