00:01
Productive efficiency talks about the proper allocation of inputs in order to get the most efficient allocation of outputs.
00:11
How do you properly place labor and capital in order that you minimize your costs and you can maximize your profits? so here i have a production possibility frontier between labor and capital.
00:25
Our two inputs.
00:27
And i'm going to draw, for example, four points, a, b, c, and d.
00:36
So which of these points is productively, quote, unquote, productively efficient? at a, this is inefficient because you are not producing as much as you could be producing.
00:48
At point d, this is, you know, impossible to do with our current resources.
00:54
So on b, because it is on the frontier, we can produce at that point...