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Economic Efficiency

In the private sector, being “more efficient” means one of two things when discussing finance and economic issues: (1) increasing output levels while using the same amounts of input or (2) maintaining output levels while using lesser amounts of input. However, the standard used to measure efficiency in public schools is not the same standard often used to measure efficiency in the business community. When applied to education finance, the concept of efficiency is concerned with how much education or knowledge is delivered to—and acquired by—students, and at what cost. Efficiency can be measured and interpreted in many ways, for example, when no individual can be made better off without another person being worse off (Pareto efficiency) or when the gains to some individuals outweigh ...

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