Final answer:
The assertion that financial efficiency is solely about generating revenue from production and management decisions is false. Financial efficiency relates to how well a company uses its resources to generate income effectively. Productive and allocative efficiencies are about the optimal production and allocation of resources, respectively.
Step-by-step explanation:
The statement "Financial efficiency measures how effective the business is in generating revenue from the production and management decisions" is false. Financial efficiency more accurately reflects how well a company uses its assets and liabilities to generate income and manage its resources effectively, rather than just regarding the generation of revenue from production and management decisions alone.
Looking at productive efficiency, this concept is about producing goods in such a way that it is impossible to produce more of one good without decreasing the quantity of another. This is demonstrated when choices are made along a given production possibilities frontier (PPF) at points like B, C, and D, symbolizing an efficient use of resources.
On the other hand, allocative efficiency refers to the mix of goods being produced, indicating the allocation of resources in a way that reflects society's preferences and is achieved when the choice along the PPF represents what society most desires. Therefore, financial efficiency encompasses broader aspects of an organization's financial management rather than being solely tied to its production and management decisions.