Using The Lemonade Stand Example: If you get a pound of lemons and you squeeze each lemon improperly so that all of the lemon juice isn't squeezed out of the lemon piece then you are not using your ingredients (the lemons) a well a you could. That means you will need to buy more lemons to make that amount of lemonade you could have made if you squeezed the lemon juice out of the lemon properly. If you only squeeze the lemon hard enough to get half of the lemon juice out then you inefficiency of production (i.e. ineptitude if using you ingredients in making ou lemonade) will be much more. The lemonade stand that uses it's lemon and sugar and water MOST efficiently - with the bests taste - will make the most amount of profit.
Dictionary Definition of Efficiency;
1: the quality or degree of being efficient
2a : efficient operation b (1) : effective operation as measured by a comparison of production with cost (as in energy, time, and money) (2) : the ratio of the useful energy delivered by a dynamic system to the energy supplied to it
Definition from Investopedia:
What Does Efficiency Mean?
A level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. Efficiency relates to the use of all inputs in producing any given output, including personal time and energy.
Investopedia explains Efficiency
Efficiency is an important attribute because all inputs are scarce. Time, money and raw materials are limited, so it makes sense to try to conserve them while maintaining an acceptable level of output or a general production level.
Being efficient simply means reducing the amount of wasted inputs.
When a project is efficient you minimize waste. You put in money into a project and attain specific short-term and long-term goals. In some cases, efficiency and inefficiency is difficult to estimate, however in other cases it is easy.
Here is an example of gross inefficiency from Greece (money wasted into unfulfilled projects):
In the southern suburbs of Athens, the abandoned terminal building at the city's old international airport stands as a symbol of promises unfulfilled.
Closed down a decade ago, the site includes 170 acres of prime coastal land on the shores of the Aegean sea and for some time there have been ambitious plans to sell it for redevelopment to the Gulf state of Qatar.
But so far they are just that - plans. And that makes the rest of the eurozone jumpy.
Here is another example of gross inefficiency (money wasted by putting it into a project that was known to fail - a level of inefficiency that really is impressive... so impressive that the sentence "set-up to discount the healthier alternative energy" may be more appropriate);
Daily Show Expose: That Custom-Tailored Obama Scandal You Ordered Is Finally Here - Solyndra's failure doesn't discredit the entire idea of a green energy economy, but some might take it as a sign of the Obama administration's incompetence. (08:10):
The following is an extract from a news report about the same inefficiency in the video above:
Energy-related loan guarantees arose from the stimulus legislation of 2009. Policy makers thought a huge infusion of low-cost loans would create many thousands of jobs at solar- panel factories, alternative-energy power plants and the like. There was an implicit assumption that most of these ventures would succeed. Barring fraud, Solyndra’s failure reflects the company’s bet on an inadequate technology. Its tubes, coated with an unusual four-metal compound, were supposed to cut power costs more than 20 percent. That wasn’t nearly enough. Production costs fell much faster for a rival technology, conventional flat silicon panels, and Solyndra couldn’t compete.
The guys who set-up this project (possibly due to another sex bribe which the last administration was known for) were George Bush & Dick Cheney:
Exclusive Timeline: Bush Administration Advanced Solyndra Loan Guarantee for Two Years, Media Blow the Story
What critics fail to mention is that the Solyndra deal is more than three years old, started under the Bush Administration, which tried to conditionally approve the loan right before Obama took office. Rather than “pushing funds out the door too quickly,” the Obama Administration restructured the original loan when it came into office to further protect the taxpayers’ investment.
Stranger (or more revealing): What The Press Is Getting Wrong About Solyndra