Are the concepts of equity and efficiency different? Why or why ...

[pane00]

Are the concepts of equity and efficiency different? Why or why not?
 
  What will be an ideal response?

Question 2

Which of the following explains the increase in income inequality since 1980?
 
  A) A widening gap between the wages of skilled and extensively-educated workers and the wages of those with fewer skills and less education
  B) A rise in the number of single-parent families at low income levels and a rise in two-parent two-earner families at higher income levels
  C) An increase in the supply of less-skilled workers combined with an increase in demand for more highly-skilled workers
  D) All of the above.

[phuda]

Answer to Question 1

Yes, the concepts of equity and efficiency are different. Equity focuses on the distributive aspect of resources across society. Hence, equity is more concerned with how the pie is allocated to various economic agents.
An economy is said to be efficient when waste of resources is eliminated and social surplus is maximized. Thus, efficiency relates to making the societal pie as large as possible.

Answer to Question 2

D

[pane00]

YES! Correct, THANKS for helping me on my review

[scottmt]

Gracias!