Economics A-Level
Efficiency
What Efficiency means in Economics A-Level, as defined for AQA.
Definitions of Efficiency
Exam boards and our study guides word this term in slightly different ways. Learn the version your board uses.
Check what you remember
Read the wording for your board, then hide it and explain Efficiency in your own words. Rough notes are fine. This is a self-check, with no mark or grade.
Reference: AQA
The long-run equilibrium shows neither productive efficiency, as production is not at the lowest point of average cost, nor allocative efficiency, as price is greater than marginal cost.
Productive, allocative, and dynamic efficiency, used as the primary criteria for evaluating the effects of these policies on economic performance.
The profit motive can drive productive and dynamic efficiency, reducing X-inefficiency often found in state monopolies.
Topics that use Efficiency
- Monopolistic competition (AQA A-Level)
- Public ownership, privatisation, regulation and deregulation of markets (AQA A-Level)
Related terms
- Allocative efficiency
- Asymmetric information
- Barriers to entry and exit
- Economic performance
- Government failure
- Imperfect information
- Monopoly power
- Natural monopolies
Using Efficiency in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
Practise Economics questions
Create a free account to answer exam-style questions on this topic and get feedback on your answers.
Start free
All Economics A-Level termsA week of Premium from your first lesson · Then the free plan continues · No card, no charge