Production Efficiency

  

Aw, the fresh air of economic efficiency.

Production efficiency is achieved when a firm is producing goods so efficiently that they can’t produce more in one area without producing less in another area.

If this sounds like the production possibility frontier, or production possibilities curve (PPC), that’s exactly what this is. When production is efficient, firms are producing on the PPC: they’re fully utilizing all available resources. That means no waste in the inputs, creating the maximal output. Making the most with the little you have (literally the most possible), making lemonade from lemons...this is the stuff of production efficiency.

All points on the PPC are production efficient, so take your pick. But if you’re producing at one point on the PPC and want to switch to another on the PPC, there will be tradeoffs. If a firm is making rubber ducks and rubber tires at production efficiency, then that means they’d have to sacrifice some rubber ducks to make more tires, or vice versa.

How can you look those rubber duckies in the eyes and do that to them?

See: Production Possibility Frontier.

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Econ: How does Technology Change Market ...6 Views

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And finance Allah shmoop What is technological change Well let's

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see We all benefit from technology Just think about it

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We're talking to you through time and space thanks to

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a little thing called the Internet Yeah great No big

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deal In economics technological change is used to describe anything

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that increases output without increasing input In other words technological

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changes magic It's anything that makes creating economic value more

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efficient like the Internet and computers are tools that we

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often think of when we hear technology But changes in

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processes count as technology as well For instance the invention

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of the assembly line and great process there was first

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put into play by Henry Ford in the late nineteen

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twenties and it was the key to making mass production

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possible By combining the use of machines with stationed workers

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and interchangeable parts Ford was able to produce far more

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vehicles with the same amount of inputs as before Even

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hammers wristwatches and dialogue were once leading technological change Today

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we've got self driving cars flying cars three D printing

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and neural network development increasing market efficiency and well yes

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the case of the assembly line While workers in Ford's

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factories did have better working conditions In some ways they

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had worse working conditions In other ways workers didn't have

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to do any heavy lifting or low stooping like they

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did before And there were jobs almost anyone could dio

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plus the assembly line allowed for to pass on some

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of those efficiency gains from technological change to workers wage

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improvements Despite these benefits the turnover at Ford's assembly line

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jobs was incredibly high For a while workers could on

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Lee do the mind numbing jobs for so long It

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was also argued by Karl Marx that doing the same

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little repetitive task over and over and over again made

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it difficult for workers to feel like they were actually

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contributing anything meaningful in their jobs Well guess what The

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turnover at Ford's factories was so high that Ford decided

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to give his workers two days off working only five

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days a week eight hours a day What a concept

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increased market efficiency and supreme boredom among workers which then

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led to the forty hour work week who go forward

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Increasingly these repetitive type tasks are being done by advanced

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robots Even more creative jobs like writing for shmoop and

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making music composition are now being done by robots It's

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more robots If doing so allows them to doom or

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with less well as technological change progresses it's increasingly a

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concern that robots will take up so many jobs There

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