Why productive inefficiency and allocative inefficiency are considered wasteful in resource utilization?
JillTaylor:
In everyday parlance, efficiency refers to lack of waste. ... Every economy faces two situations in which it may be able to expand the consumption of all goods. ... using its resources inefficiently, in which case by improving efficiency and producing on the production ...
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Explanation:
However, any choice inside the production possibilities frontier is productively inefficient and wasteful because it's possible to produce more of one good, the other good, or some combination of both goods. ... Only one of the productively efficient choices will be the allocative efficient choice for society as a whole.
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