1. Is there necessarily a trade-off between equity and efficiency? give an example when there is and...

60.1K

Verified Solution

Question

Economics

1. Is there necessarily a trade-off between equity andefficiency?
give an example when there is and another one for when thereisn't a trade-off
2. Does the rate of income mobility within a person's lifetimematter for how we assess/ measure inequality?
3. Does the rate of intergenerational income mobility matter forhow we assess/measure inequality?

Answer & Explanation Solved by verified expert

4.3 Ratings (841 Votes)

Answer 1 Is there necessarily a tradeoff between equity and efficiency Introduction In any society at any point of time all the resources would be relatively scarce We cannot have whatever we want We need to decide our priorities and then distribute the resources In such a situation we need to take into consideration goals of efficiency and equity If the distribution of resources or goods in an economy is fair between different members of the society it indicates equity Efficiency is making the best out of scarce resources at the best possible price Efficiency refers to the size of economic resource and equity refers to how this economic resource is distributed When the resources are distributed we will be faced with a tradeoff between efficiency and equity This trade off is a central principle in economics However we can say that there is a tradeoff between equity and efficiency but it cannot be in every situation Explanation is mentioned below Example of trade off between equity and efficiency can be explained with environmental policy of the government Who gets the most out of exploiting the natural resources and what cost is a policy question that needs to be answered The projects undertaken would have an adverse effect on the local people who might be living there from many generations These become the victims of the project But government programmes and projects would have multiple objectives in the larger interest of the nation So there would have to be a trade off between the efficient use of resources in that area and the equity of resources distribution to the people of that area In order to do that the See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member