Do you think if a technologically efficient process has to be economically efficient or the other way around?
Economic efficiency is sort of the ‘top of the house’ effeciency. Technology is a component of total efficiency… so an economically efficient process must be technologically efficient as well… but not every technologically efficient process is economically efficient.
I missed question on this in the practice exam. I didn’t think through it.
Yeah, I just took exam 2 pm as well.
there you go.
I think tech addresses input for each unit of output while econ addresses same thing from the cost perspective. You might have less material used for out put (tech efficeint) but they might cost high (econ ineffcient).
tech efficient = lowest units of input, can have different combinations econ efficient = lowest total cost, must be one of the tech efficient combinations