0
$\begingroup$

On the diagram below it is stated that A' has input slacks as it could reduce the amount of $x_2$ and still be on the frontier (by moving to C). However I recall mix-inefficiency having a similar definition. Is there any difference between slacks and mix-inefficiency?

enter image description here

$\endgroup$
  • $\begingroup$ Mix-inefficiency may include cases of slack, but may include other situations too $\endgroup$ – Henry Jul 3 '18 at 23:52
1
$\begingroup$

If by "slack" we mean that part of the quantity used from an input does not result in an increase in output, then it is evident that this is an inefficient mix of inputs. It is not even about re-allocating inputs to reduce/minimize costs, we are clearly totally wasting some input quantity.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.