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APC: The abbreviation for average propensity to consume, which is the proportion of income, usually measured as disposable income or national income, used for household consumption expenditures. It is found by dividing consumption by income. The average propensity to consume, abbreviated APC, most often pops up in discussions of Keynesian economics. The average propensity to consume is the average amount of total household income that is devoted consumption expenditures.

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TECHNICAL EFFICIENCY:

Obtaining the greatest possible production of goods and services from available resources. In other words, resources are not wasted in the production process. This is also considered as engineering efficiency and should be contrasted with economic or allocative efficiency.
Technical efficiency means that natural resources are transformed into goods and services without waste, that producers are doing the best job possible of combining resources to make goods and services. There is no waste of material inputs. There are no workers standing idly around waiting for spare parts. The maximum amount of physical production is obtained from the given resource inputs. In essence, production is achieved at the lowest possible opportunity cost.

Technical efficiency is a prerequisite for allocative or economic efficiency. Economic efficiency is achieved if the highest possible level of satisfaction is obtained from given resources. Because satisfaction is derived from consuming goods and services, economic efficiency requires the greatest possible level of production, that is, technical efficiency.

However, while technical efficiency is necessary for economic efficiency, it does not guarantee economic efficiency. While technical efficiency might be achieved in the production of purple spotted stuffed animals, allocative efficiency is not achieved if no one actually wants purple spotted stuffed animals and they remain stored in a big purple warehouse.

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TECHNICAL EFFICIENCY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2019. [Accessed: June 24, 2019].


Check Out These Related Terms...

     | production possibilities | technology | production | efficiency | economic efficiency | consumer sovereignty | satisfaction | full employment | opportunity cost |


Or For A Little Background...

     | good | service | allocation | resource allocation | scarcity | limited resources | unlimited wants and needs | economic goals | factors of production | economic thinking |


And For Further Study...

     | distribution standards | economic system | seven economic rules | three questions of allocation |


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