Efficiency vs. Equity

Length: 5 Pages 1277 Words

The issues between efficiency and equity have always been a contentious political debate. Efficiency means that society is getting the most it can from its scarce resources. A more efficient society can produce more with the same amount of resources. Equity means that the resources are distributed fairly among the individuals. We can view efficiency as the size of a pie, and equity being how evenly the pie is being divided. When government policies are being made, there is always a conflict between the two goals because we have to sacrifice one in order to gain the other. Now we introduce the idea of tradeoffs. In order to get one thing that we like, we usually have to give up something else. For example, if we spend more time on the job, we will have less time to spend on leisure. If we sleep more, we will have less time to study. Efficiency and equity is in fact one of the biggest tradeoffs that a society will face. When government designs its policies, it has to make sure that the society is making the maximum use of its scarce resources while also making sure that the distribution of the benefits received by using the resources is divided somewhat evenly among the citizens. Imagine the pie that we started with, it Continue...


More sample essays on Efficiency vs. Equity

    Japan vs. US economy
    Japan vs. US economy. The .... West. Japanese subordinate pursuit of economic efficiency to social equity and domestic harmony. Economic .... (955 4 )

    Perfect competition Vs the real world
    Perfect competition Vs the real world. .... does not take a government's role in ensuring efficiency of markets .... a firms control and the need for equity and fairness .... (1122 4 )

    insider trading
    .... owing more 10% of the firm) to report trades in equity securities of .... 2.7 EFFICIENCY VS UNFAIRNESS The SEC exercises its regulatory powers to maintain markets .... (6195 25 )

    Coke vs. Pepsi
    .... both Marketing produce begin bought October issues vs for leader .... Cola, cans a its manufacturers and efficiency, room feels .... equity), in Pepsi then of war, can. .... (3301 13 )

    Coke vs. Pepsi
    Coke vs. .... by increasing production locally), acceptability (building brand equity), and afford .... is to win market share through distribution efficiency (Murphy, 6 .... (3167 13 )

For example, this can include the welfare-to-work programs, which provide assistance to poor families given that they participate in job search and job placement programs. The government should give a lot of tax cut opportunities for the rich, for example, when the rich expand their businesses and hire more workers. This solution will make everybody happy. As the pie gets smaller, everybody will eventually get a smaller piece of the pie. If you realize that 99 of your income would be taken out of your pocket and handed to someone else, will you work as hard as you would if you get to keep all of what you earned The answer is obvious; you will be more reluctant to work if you are only keeping 1 of what you will earn. As a result, the poor would advocate equity because they want the government to provide them with some form of economic assistance. None of the articles are biased towards any particular class because two authors were making a positive statement, a statement on the issues of tradeoff between efficiency and equity instead of making a self opinion on the issues, which is likely to be biased. Such forms of economic assistance include both the income transfer and in-kind transfer (payment made in terms of goods and services instead of cash). The rich often advocate efficiency over equity because they will get a big slice of the pie if the government does not pay any attention to the problem of equity. The first case refers to the disabled, elderly and children who are not capable of working. When we think in terms of the pie, that is when the pie gets too small and eventually disappears, and nobody is able to benefit because nobody is able to get a piece of the pie that no longer exists. Even though the total utility will be maximized by perfect equity, a society can never reach the point of perfect equity simply because people respond to incentives. In the second case, the government can implement some program that requires the poor families to act in a certain way in order to receive transfer. Income transfer and in-kind transfer, as well as Higher Education opportunities should be provided for the poor. This is the case of the tradeoff between efficiency and equity.

PROFESSIONAL ESSAYS:

Federal Income Tax vs a Consumption Tax
Federal Income Tax vs a Consumption Tax. in some detail the issues of neutrality and equity with regard to A consumption tax would improve the efficiency of the (6905 28 )

Industrial Organization & REITs
The overall return for equity REITs in 1995 was companies have to decide the benefits of CMBS vs. All of these efficiency factors combine to tighten spreads (9584 38 )

National Sales Tax
tax would have a high degree of horizontal equity. economic redistribution (the notion that efficiency is not Graetz, Michael J. Revisiting the Income Tax vs. (4755 19 )

BEA Application Infrastructure Software
trading partner collaboration Sell-side efficiency and visibility ôpureo integration deals head-to-head vs. can leverage our brand equity, financial stability (8932 36 )

Minnesota Mining and Manufacturing (3M) Minnesota Mining and
through such activities as acquisitions, equity investments and to provide a maximum level of efficiency across borders Conclusion & Recommendations 3M vs. (2956 12 )

Economic Integration of the EEC
will likely result in improved oper ational efficiency. markets, and changes in 16American equity stock prices Settling for Less: European Monetary Sys tem vs. (4251 17 )