The atom economy (also called atom utilisation) is a measure of how much of the starting materials end up as useful products. It matters for sustainable development, because high atom economy means fewer resources are used up and less waste is made. It also matters for economic reasons, because wasted atoms are wasted money.
You work it out from the balanced equation:
% atom economy = (relative formula mass of desired product ÷ sum of relative formula masses of all reactants) × 100
Example: calcium carbonate breaks down as CaCO3 → CaO + CO2. The Mr of CaCO3 is 100 and the Mr of the desired product CaO is 56. The atom economy is 56 ÷ 100 × 100 = 56%. The rest of the mass ends up as the waste gas CO2. A reaction that makes only one product, such as hydrogen adding to ethene to make ethane, has an atom economy of 100%, because it makes no by-products.
Higher tier: a chemist chooses a reaction pathway by weighing up atom economy (if it is not calculated), yield, rate, equilibrium position and how useful the by-products are. A reaction with a lower atom economy may still be chosen if its by-products can be sold.