Are there real life examples of allocative or productive efficiency?
- Thread Starter
- 19-01-2017 14:22
- TSR Support Team
- Clearing and Applications Advisor
- 22-01-2017 17:04
Allocative efficiency has a slight social/moral element to it, but is essentially about maximising overall social utility by ensuring the value of something maximises the value of the resources used to produce it. You don't want, for example, an economy that only produces guns which takes away money from improving healthcare (or other uses seen as more socially beneficial).