What is efficiency?
Producing at a lower cost or using fewer resources when making a product or providing a service. Also meeting the needs of consumers.
HOW TO BECOME EFFICIENT
• Use fewer raw materials
• Use fewer workers
• Have fewer managers
• Replace high cost labour with low cost technology
• Less waste, fewer reject goods
BENEFITS OF EFFICIENCY
• Lower costs
• Lower prices
• More sales (revenue)
• Greater profits
• Higher bonuses for workers / managers
• Greater returns for shareholders (limited company)
PROBLEMS OF GREATER EFFICIENCY
• Quality may suffer
• Low morale in the workplace as jobs are lost
• Stress as people have to work harder
• Redundancy payments to workers
• Initial cost of buying technology
3/07/2008
Scare Resources
Scare Resources There are only a limited number of resources such as workers, machines, factories, raw materials etc. Yet there are a number of different ways in which they could be used.
Basic government spend
Basic money
Similarly people only have a limited amount of money. Yet they have lots of needs and wants to satisfy.
Basic water
Also the Government has a limited amount of money £440 billion !!!!. However, it is unable to satisfy all its wants.
THE BASIC ECONOMIC PROBLEM – the problem arises because resources are scarce, but human wants are unlimited.
What is the difference between needs and wants?
Basic government spend
Basic money
Similarly people only have a limited amount of money. Yet they have lots of needs and wants to satisfy.
Basic water
Also the Government has a limited amount of money £440 billion !!!!. However, it is unable to satisfy all its wants.
THE BASIC ECONOMIC PROBLEM – the problem arises because resources are scarce, but human wants are unlimited.
What is the difference between needs and wants?
Scare Resources
Scare Resources There are only a limited number of resources such as workers, machines, factories, raw materials etc. Yet there are a number of different ways in which they could be used.
Basic government spend
Basic money
Similarly people only have a limited amount of money. Yet they have lots of needs and wants to satisfy.
Basic water
Also the Government has a limited amount of money £440 billion !!!!. However, it is unable to satisfy all its wants.
THE BASIC ECONOMIC PROBLEM – the problem arises because resources are scarce, but human wants are unlimited.
What is the difference between needs and wants?
Basic government spend
Basic money
Similarly people only have a limited amount of money. Yet they have lots of needs and wants to satisfy.
Basic water
Also the Government has a limited amount of money £440 billion !!!!. However, it is unable to satisfy all its wants.
THE BASIC ECONOMIC PROBLEM – the problem arises because resources are scarce, but human wants are unlimited.
What is the difference between needs and wants?