Efficiency:

Paul Heyne’s definition:

Efficiency = value of output / value of input

Mankiw”s definition:

Efficiency: the property of a resource allocation of maximizing the total surplus received by all members of society.

Maximize: Total Surplus = Value to Buyers – Cost to sellers

Other concepts:

Allocative Efficiency - Producing the combination of goods and services that satisfies society’s wants to the greatest degree.

Technical Efficiency - Producing goods and services for the least possible cost while maintaining full utilization of resources.