 In the previous section, we talked about systems functioning but purposely left out some important aspect to the process, that is to say, what the system is processing and how well it does this. Whether we are talking about a car, political system, or a farm, we are often interested in answering the question, how well does it work? That is to say, what is the ratio between the resources that the system takes in and those that it outputs? In the language of system theory, this is called the systems efficiency. Answering this question may not be too difficult if we are simply talking about something like a steam engine. But if we wish to be able to reason about all types of systems in this way, the question becomes a little bit more difficult than it might sound. So, we need to start by being clear about some of the terms we are using. Firstly, a resource is essentially a stored form of energy, an ordered structure that enables a system to perform work. Examples of this might be the food humans metabolize in order to fuel our bodies, or petroleum, where energy is stored in chemical bonds. The opposite of energy is entropy, which is the incapacity to perform work and a measurement of the degree of disorder within a system. Whereas a stored form of energy is called a resource, a stored form of entropy may be loosely equated to the term waste. An example of an entropic system might be a vase that has fallen on the ground and shattered. The parts are arranged in a random, unordered fashion, making them incapable of serving their intended function. Energy and entropy are typically measured using information theory. That is to say, we can measure the degree of order or disorder within a system in terms of the information correlation between its constituent elements. The more patterns there are between the parts, the less information it will take to describe the system, and thus the more ordered it is said to be. Thermodynamics is the area that studies energy in relation to heat. Whilst energetics is the area that studies energy on a broader level within all physical systems. The functioning of a system can be either productive or consumptive. A function can be said to be productive if the system takes in some resource from its environment and performs work on this resource by transferring energy to it and thus outputting a resource of greater value. An example of this might be simply lifting an object off the ground When we model this phenomena as a system, we can see that we inputted an object at the low level of potential gravity and in transferring energy from ourselves to the object by lifting it, we outputted an object at a high state of potential energy, a resource that now has a greater capacity to perform work than it did before we performed this operation on it. Inversely, a function can be said to be consumptive when the resource that was inputted transfers its energy to the system, conserving this energy with the system's boundary, whilst outputting entropy, otherwise known as waste, to its environment. Probably the simplest example of this is the metabolic process of digestion within mammals. Here the resource of food is inputted to the system, energy is extracted from it, and a waste product of excretion is exported from the system. So we can define systems efficiency as a ratio between energy inputted and the energy outputted. But unfortunately, what is considered energy and what is considered entropy is by no means objective and is often relative to the system's environment. To take an example of this, a light bulb consumes some amount of electricity as its input and produces some amount of light as its output. Though not all electricity is converted to light, some is converted to heat energy. With respect to the functioning of the light bulb as a light producer, this heat would be considered waste or entropy, but if we were interested in heating our house, then this excess heat energy may be considered a resource. In order to understand this better, we need to think outside of systems, that is, start talking about their environment. And this is where we will pick up in the next video.