Which of the following describes the equity-efficiency trade-off?


What is the equity efficiency trade off?

An equity-efficiency tradeoff results when maximizing the productive efficiency of a market leads to a reduction in its equity—as in how equitably its wealth is distributed. … The concern for some is that the least affluent members of society receive a disproportionately small share of the increasing wealth.14 мая 2019 г.

What is efficiency and equity in economics?

Efficiency is concerned with the optimal production and allocation of resources given existing factors of production. For example, producing at the lowest cost. See: Different types of efficiency. Equity is concerned with how resources are distributed throughout society.

What is a trade off in economics?

Economics is all about tradeoffs. A tradeoff is loosely defined as any situation where making one choice means losing something else, usually forgoing a benefit or opportunity. We experience tradeoffs in zero-sum situations, when a plus in one area must be a negative in another.

What is equity in macroeconomics?

Equity looks at the distribution of capital, goods, and access to services throughout an economy and is often measured using tools such as the Gini index. Equity may be distinguished from economic efficiency in overall evaluation of social welfare. … It has been studied in experimental economics as inequity aversion.

Why is equity so important?

Equity is important because it’s a mechanism by which you can convert assets into cash should the need arise. Additionally, you can often borrow against the equity in your assets such as the case with a home equity loan or a home equity line of credit (HELOC).

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What is an example of a trade off?

Trade-off definitions. … The definition of trade off is an exchange where you give up one thing in order to get something else that you also desire. An example of a trade off is when you have to put up with a half hour commute in order to make more money.

What is the concept of equity?

LAST UPDATED: 04.21.16. In education, the term equity refers to the principle of fairness. While it is often used interchangeably with the related principle of equality, equity encompasses a wide variety of educational models, programs, and strategies that may be considered fair, but not necessarily equal.

What exactly is equity?

Equity represents the shareholders’ stake in the company, identified on a company’s balance sheet. The calculation of equity is a company’s total assets minus its total liabilities, and is used in several key financial ratios such as ROE.

What are some examples of equity?

Examples of stockholders’ equity accounts include:

  • Common Stock.
  • Preferred Stock.
  • Paid-in Capital in Excess of Par Value.
  • Paid-in Capital from Treasury Stock.
  • Retained Earnings.
  • Accumulated Other Comprehensive Income.
  • Etc.

What is a trade off give at least one example?

A trade-off is an exchange in which one benefit is given up in order to obtain another. Example: a material may be used to build a house because it is attractive to customers even though it is not as durable.

What is the difference between a trade off and an opportunity cost in economics?

While a trade-off denotes the option we give up, to obtain what we want. … On the other hand, the opportunity cost is the cost of the second best alternative given up to make a choice.

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What is another word for trade off?

balance, set-off, disadvantage, contradiction, arbitrage, equilibrium, Equilibria, arbitrate, refereeing, ‘arbitrage, quandary, accommodation, trade, counterparty, agreement, setoff, trading, give-and-take, equalisation, conundrum, counterbalance, bargain, drawback, swap, adjudicative.

How does equity affect the economy?

Equity-enhancing policies, particularly such investment in human capital as education, can, in the long run, boost economic growth, which, in turn, has been shown to alleviate poverty. … Policies that promote equity can boost social cohesion and reduce political conflict.

What is equity in society?

Our society is continuing to make steps towards equality but being equal and fair is not always straightforward. Sometimes, people may need differing treatment to make their opportunities the same as another’s. This is called equity.

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