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'Economic efficiency' is a general term for the value assigned to a situation by some measure designed to reduce the amount of waste or "friction" or other undesirable economic features present. Economic efficiency is achieved when the cost of producing a given output is as low as possible. Production of a unit of good or services is termed economically efficient when that unit of good or service is produced at the lowest possible cost. In current usage, the term ''microeconomic reform'' refers to any policy that promises to increase economic efficiency (whether it does so or not).
In order to achieve 'Economic efficiency' the following need to occur:
1) Any product X is produced at the lowest cost.
2) The economy uses all the raw materials that in hand. Example: X,Y are produced by a,b. In efficient productivity, we use both a,b in a way that we cannot produce anymore X or Y with the a,b that had left.
There are several measures of economic efficiency,
including:

★ Pareto efficiency

★ Kaldor-Hicks efficiency

★ X-efficiency

★ Allocative efficiency

★ Distributive efficiency

★ Productive efficiency

★ Optimisation of a social welfare function
For applications of these principles see:

★ Efficient market hypothesis

★ Welfare economics

★ Production theory basics

★ Microeconomic reform
==Documentary films==

★ OPTIMUM – The Crusade For Efficiency, A Film by Henry Colomer, 2000, 55 minutes, This documentary focuses on three crusaders for efficiency, namely Jeremy Bentham, Charles Babbage and Francis Galton.

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See also

See also

★ Distribution (economics)

★ Business efficiency

★ Compensation principle

★ Inefficiency