Question

1. Discuss the efficiency versus equity tradeoff in economics. Include in your discussion the social welfare functions in Chapter 2 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 suggests that advantages from scarce resources are distributed uniformly to the social members.

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

Equal opportunity conjointly called equality of opportunity meaning folks are right to treated equally and that they get equal opportunities and that they not discriminate on the fundamental of sex, race or age. Equality of outcome may be a stage during which people that have same wealth and financial gain.

Commodity philosophy = It suggests that handiness of commodities to everybody equally.