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Efficiency

EFFICIENCY


Efficiency, or allocative efficiency, is a central concept of economic theory. If one plan produced a product with fewer resources than another plan, it is said to be more efficient. A system that produces maximum output from minimum input of resources is efficient. Resources, including natural resources from the earth, labor, and technology, are considered finite or limited. To reach technical efficiency, they must be allocated or distributed so that the best use of available resources is made without waste, undue effort, or cost. Technical efficiency must result in the consumers' wants being satisfied within their economic purchasing power.

Increased efficiency is closely tied to improvement in technology. When a business adopts a new technology or improved plan of production to produce more of a product with fewer resources yet maintains the product's quality, then an efficient change has been made. A classic example occurred in the early 1900s when Henry Ford (18631947) developed a new method for producing cars, the assembly line. Rather than a group of workers making a complete car one at a time, each worker performed one task and cars were mass produced. This approach greatly reduced the time and cost needed to make a car. Resources saved would ideally be used in other areas.

In a perfectly efficient economic system resources are allocated into their highest-valued uses as evidenced by consumers' willingness to pay for the final product. While furniture or flooring made of oak garners a high price, no one would pay extra for shipping pallets or matchsticks made of oak. In a free market economy as in the United States the forces of supply and demand guide resources to their most efficient uses. In other words profits signal moves in resources to their highest valued use. A central government allocates resources in a command or planned economy as in the former Soviet Union.

See also: Assembly Line, Mass Production, Productivity

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"Efficiency." Gale Encyclopedia of U.S. Economic History. . Encyclopedia.com. 16 Aug. 2017 <http://www.encyclopedia.com>.

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efficiency

efficiency There are conflicting notions of efficiency in everyday work-life. Technical efficiency is relatively straightforward, and describes the relation of various energy inputs into equipment, in relation to output (though it may be difficult or meaningless to measure the latter). But there is no necessary reason why a technical optimum should coincide with maximum economic efficiency. Perfectly functioning equipment may well be closed down for financial reasons. The efficient use of human beings often crosscuts both, whether one is dealing with optimum use of physiological effort; psychological well-being (such as avoidance of stress) which may be vital to long-run as opposed to short-run task performance; or organizational and social efficiency, such as avoiding waste of human capital through unemployment or structural dislocation. Quite apart from these conflicting meanings, the notion of efficiency also raises questions of underlying and perhaps irreconcilable values about what ultimately contributes to individual and social welfare.

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"efficiency." A Dictionary of Sociology. . Encyclopedia.com. 16 Aug. 2017 <http://www.encyclopedia.com>.

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efficiency

efficiency Work a machine does (output) divided by the amount of work put in (input). It is usually expressed as a percentage. In mechanical systems there are energy losses, such as those caused by friction. Output never equals input, and efficiency is always less than 100%. A machine with an efficiency of 100% would be capable of perpetual motion. For simple machines, efficiency can be defined as the force ratio (mechanical advantage) divided by the distance ratio (velocity ratio).

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"efficiency." World Encyclopedia. . Encyclopedia.com. 16 Aug. 2017 <http://www.encyclopedia.com>.

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efficiency

ef·fi·cien·cy / iˈfishənsē/ • n. (pl. -cies) the state or quality of being efficient: greater energy efficiency. ∎  an action designed to achieve this: to increase efficiencies and improve earnings. ∎  technical the ratio of the useful work performed by a machine or in a process to the total energy expended or heat taken in. ∎ short for efficiency apartment.

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"efficiency." The Oxford Pocket Dictionary of Current English. . Encyclopedia.com. 16 Aug. 2017 <http://www.encyclopedia.com>.

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efficiency

efficiency:1 In business and industry, see industrial management; productivity. 2 In physics, seemachine; work.

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"efficiency." The Columbia Encyclopedia, 6th ed.. . Encyclopedia.com. 16 Aug. 2017 <http://www.encyclopedia.com>.

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efficiency

efficiencyChrissie, Cissy, kissy, missy, prissy, sissy •dixie, pixie, tricksy, Trixie •chintzy, De Quincey, wincey •efficiency, proficiency, sufficiency •Gypsy, tipsy •ditzy, glitzy, itsy-bitsy, Mitzi, ritzy, Uffizi •Eurydice •odyssey, theodicy •sub judice • prophecy • anglice •chaplaincy • policy • baronetcy •governessy • Pharisee • actressy •clerisy, heresy •secrecy • statice • captaincy •courtesy •dicey, icy, pricey, spicy, vice •stridency • sightsee •bossy, Flossie, flossy, glossy, mossy, posse •boxy, doxy, epoxy, foxy, moxie, poxy, proxy •bonxie •poncey, sonsy •dropsy, popsy •biopsy • heterodoxy • orthodoxy •autopsy

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"efficiency." Oxford Dictionary of Rhymes. . Encyclopedia.com. 16 Aug. 2017 <http://www.encyclopedia.com>.

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"efficiency." Oxford Dictionary of Rhymes. . Retrieved August 16, 2017 from Encyclopedia.com: http://www.encyclopedia.com/humanities/dictionaries-thesauruses-pictures-and-press-releases/efficiency