Question

What is the difference between technical efficiency and economic efficiency? Technical efficiency in production means that the most technologically advanced machinery is used in the production of a good. Economic efficiency means using the method that produces the greatest profit for a given level of output. Technical efficiency in production means that the most technologically advanced machinery is used to produce a good. Economic efficiency means using the method that produces a given level of output at the lowest possible cost. Technical efficiency in production means that as few inputs as possible are used to produce a given output. Economic efficiency means using the method that produces the greatest profit for a given level of output. Technical efficiency in production means that as few inputs as possible are used to produce a given output. Economic efficiency means using the method that produces a given level of output at the lowest possible cost.

Answer 1

The correct option is D.

Technical efficiency in production means that as few inputs as possible are used to produce a given output. Economic efficiency means using the method that produces a given level of output at the lowest possible cost.

Step-by-step explanation:

Technical efficiency is the degree to which the actual output of a production unit approaches its maximum. For example, a firm is said to be technically efficient if a firm is producing the maximum output from the minimum quantity of inputs such as labour, technology and capital. In technical efficiency, unemployment of resources are not required.

Economic efficiency is concerned with producing at the lowest point of the short run average cost curve. Economic efficiency assumes minimum cost for a production of goods or services, maximum output, and maximum surplus for the operation of the market. Economic efficiency indicates a balance between profit and loss.

Answer 2

The correct answer is the option B: Technical efficiency in production means that the most technologically advanced machinery is used to produce a good. Economic efficiency means using the method that produces a given level of output at the lowest possible cost.

Step-by-step explanation:

On the one hand, technical efficiency is reached when the company has acquire a certain level of technology in its production process so that it produces with a competitive advantage in comparison with the other firms. Therefore that the technical efficiency in production means that the most technologically advanced machinery is used to produce a good.

On the other hand, the economic efficiency is reached when the organization tends to work at a level of production so high that the fact of producing so many goods turns out to give the company economic of scale and in that way there are saving money or producing with the lowest costs as possible.