ADC resolution and effective number of bits
A 3 bit ADC means you have 3 physical bits, and can output up to 8 different codes. It doesn't say anything about how accurately those voltages represent any particular coding, or whether any will be missing.

Two effective bits means that when using some specified measurement method, the ADC behaves as well as a perfect ADC with 2 bits would.

Usually, the method is to drive a nearly full scale sinewave into the ADC, spectrum analyse the result, and calculate the SNR, the signal to noise ratio. The effective number of bits (ENOB) is the size of theoretically perfect ADC (could be fractional) that produces the same SNR. Or the sum could be done for SINAD, the signal to noise and distortion ratio, which would produce a slightly different answer.

As you can see, this definition produces essentially no useful information about what the average code would be for any specific DC input, or the 'size' of the LSB when measured with a DC input.