1. Need an ICT room to do this with
Need to put student version of this onto network…..

2. Are you efficient?

3. Syllabus requirements
You need to know the key types of economic efficiency concepts
Productive efficiency
Allocative efficiency
Inefficiency – x inefficiency
Dynamic efficiency

4. What is efficiency?
Efficiency is really about a society making the best or optimal use of our scarce resources to satisfy most wants & needs.

5. Static Efficiency
Static efficiency occurs at a point in time and focuses on how much output can be produced now from a given stock of resources, and whether producers are charging a price to consumers that fairly reflects the cost of the factors used to produce a good or a service.
This can be either:
Productive Or
Allocative

6. Allocative efficiency
Allocative efficiency occurs when the value consumers place on a good (reflected in the price people are willing and able to pay) equals the cost of the resources used up in production.
The condition required is that
price = marginal cost.

7. Allocative Efficiency in diagrams
Demand & Supply equilibrium diagram

9. Productive efficiency
Productive efficiency is achieved when the output is produced at minimum average total cost (AC).
If a supplier has achieved minimum average total cost in the long run, is has exploited the available internal economies of scale and reached the minimum efficient scale.
Productive efficiency exists when producers minimize the wastage of resources in their production processes.

10. Productive efficiency

11. World’s largest printing plant!
Just off the M25!
Bexley

12. Dynamic efficiency Dynamic efficiency occurs over time.
It focuses on changes in the degree of consumer choice available in markets together with the quality of goods and services available.
Dynamic efficiency also refers to the rate of technological advancement in a particular market or industry – this is linked to the investment made by suppliers in new capital and research and development.

13. How much of a techie nerd are you?

14. What’s the latest high level mobiles on the market?

15. Technology & phones market
T-Mobile's G1
HTC Diamond

16. Inefficiency
potential cost inefficiencies arising from a lack of effective competition within a market. These are known as X-inefficiencies and are often used as part of the case against pure monopoly.
Companies that face little or no real competition often allow their fixed costs of production to rise – for example by running inefficient administration systems and by allowing the build up of sizeable expense account systems

17. Old technology = inefficient!

18. Examples of inefficiencies
Food waste blamed on BOGOFs

19. What happens to companies that are inefficient?
Liquidation!

20. Your task
Your task is to reprint the key definitions from this slideshow which YOU ADD TO with key images….
Go onto Google Images and search for images that will help you remember the key terms…
You will need to print slides 2-5,8,11,15 as HANDOUTS with 4 slides per printout

21. Further reading

22. Finished?
Your hwk yesterday was to find a news article to analyse for a business that has faced
PROFITS Or
LOSSES
Use the ICT now to find your article
& can write up some analysis for this!