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LOCAL OUTPUT: An output that has a relatively small geographic market area due to the high cost of transportation. The high transportation cost means it is easier (that is, less expensive) to locate consumers near the output rather than trying to bring the output to the consumers. Like many things, local outputs are a matter of degree. At the other end of the spectrum lies transferrable outputs. Services, such as legal advice, health care, and entertainment, that are consumed as they are produced, tend to have a great deal of local orientation.
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                           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, 2000-2021. [Accessed: December 3, 2021].
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On a typical day, the United States Mint produces over $1 million worth of dimes.
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"If a man hasn't discovered something that he will die for, he isn't fit to live. " -- Martin Luther King Jr., clergyman
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CME
Chicago Mercantile Exchange
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