Answer to Question #195132 in Macroeconomics for Reitumetse

Question

According to Black, et al. (2015), X- efficiency alone is not an adequate measure of economic 

efficiency in an economy. 

Do you agree? Please support your choice.

Answer 1

Yes, this is because only the outputs generated with given inputs are considered in X-inefficiency. It makes no distinction between whether the inputs are the best to use or whether the outputs are the best to produce.