|
|
HOUSEHOLD: The consuming population of an economy, which pretty much includes every living, breathing human being in a nation. The key contrast here is with business, the organizations responsible for production. In terms of the circular flow, households buy production from businesses through product markets and supply resources to business through factor markets. Check out the household sector for more.
Visit the GLOSS*arama
|
|
|
|
                           EFFICIENT: The state of resource allocation that exists when the highest level of consumer satisfaction is achieved from available resources. This state can be accomplished through markets when the price buyers are willing and able to pay for a good--based on the satisfaction obtained--is equal to the price sellers need to charge for a good--based on the opportunity cost of production. An efficient state of resource allocation means that society is doing the best it can to address the scarcity problem. Available resources are used to achieve the greatest possible satisfaction of wants and needs. The scarcity problem is not eliminated with this state, merely lessened to the greatest possible degree.Efficient MarketsA market exchange achieves an efficient state if the demand price reflects the satisfaction everyone obtains from consuming the good and the supply price reflects all opportunity cost of producing the good, that is, the satisfaction foregone.Market equilibrium, with equality between demand price and supply price, means the satisfaction obtained from the good is equal to the opportunity cost of production. The value (satisfaction) of the good produced is the same as the value (satisfaction) of other goods not produced. Satisfaction cannot be increased by producing more of one good and less of another. InefficientAn inefficient state occurs if the highest level of consumer satisfaction is not achieved from available resources. A market exchange achieves an inefficient state if the demand price does not reflect the satisfaction everyone obtains from consuming the good and/or the supply price does not reflect all opportunity cost of producing the good.Under these circumstances, a market equilibrium equality between demand price and supply price does not achieve an efficient equality between the value (satisfaction) of the good produced and the value (satisfaction) of other goods foregone. Satisfaction can be increased by producing more of one good and less of another.
Recommended Citation:EFFICIENT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2020. [Accessed: July 5, 2020].
Check Out These Related Terms... | | | |
Or For A Little Background... | | | | | | |
And For Further Study... | | | | | | |
Search Again?
Back to the WEB*pedia
|
|
|
BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites trying to buy either a 50-foot blue garden hose or a turbo-powered vacuum cleaner. Be on the lookout for small children selling products door-to-door.
Your Complete Scope
This isn't me! What am I?
|
|
|
Paper money used by the Commonwealth of Massachusetts prior to the U.S. Revolutionary War, which was issued against the dictates of Britain, was designed by patriot and silversmith, Paul Revere.
|
|
|
"Defeat is simply a signal to press onward. " -- Helen Keller, author, lecturer
|
|
AV
Actual Value
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
