General Studies · Financial and Service Evaluation
Which of the following best distinguishes 'cost effectiveness' from 'cost efficiency' in the context of service evaluation?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Cost effectiveness is output-oriented aiming to maximise results at a given cost; cost efficiency is input-oriented aiming to minimise cost at a given output✓
- 2Cost effectiveness and cost efficiency are synonymous concepts applicable interchangeably in service organisations
- 3Cost effectiveness applies only to profit-making institutions; cost efficiency applies to non-profit organisations
- 4Cost effectiveness minimises inputs; cost efficiency maximises outputs
Correct answer
Cost effectiveness is output-oriented aiming to maximise results at a given cost; cost efficiency is input-oriented aiming to minimise cost at a given output
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