Question

Discuss the efficiency versus equity tradeoff in economics. Include in your discussion the social welfare functions and the concepts of equality of opportunity versus equality of outcomes. What is commodity egalitarianism? Which do you prefer?

Answer 1

In economics efficiency is a highest level of performance by using least amount of input. Economic efficiency assumes minimum cost of production, maximum output and maximum surplus from the market operation. Equality trade-off means benefits from scarce resources are distributed uniformly to the social members.

Social welfare function is a function that ranks social status in a possible pairs as less desirable,more desirable or indifferent.

Equal opportunity also called equality of opportunity that means people are right to treated equally and they get equal opportunities and they not discriminate on the basic of sex, race or age. Equality of outcome is a stage in which people who have same wealth and income.

Commodity egalitarianism = It means availability of commodities to everyone equally.