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22. What is the difference between productive and allocative efficiency?

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User Heinzi
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Answer:

Allocative efficiency is about distributing or allocating resources in the best possible manner. E.g. in order to fight the current pandemic, more resources ($) is allocated to different health care institutions.

Productive efficiency is about how a company or a person uses the resources that it has in order to produce the greatest amount of benefits at the lowest possible cost. E.g. in a hospital, if a doctor is able to treat 15 patients per day, his/her productive efficiency will be higher than another doctor that only treats 10 patients per day.

User Bruno Klein
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