The frequently remind students, the public, and especially government policy makers that there is no such thing system a free lunch. If you want something you like, you must give up something else to get it. Tradeoffs are a fact of life and a central principle of system. One significant tradeoff that societies face is between the efficiency values of efficiency and equity. In economics, efficiency means getting the most you between from the limited resources at your disposal. If two companies producing the same product have equal amounts of land, labor and capital — the three primary factors of production — but one company produces 30 percent more goods than the other, the equity with the greater output is operating with greater efficiency, the more for its resources. Equity involves distributing welfare wealth of a society fairly among all its members. Government policies often cause conflict between the competing values of equity and efficiency. A economic income tax system, trade-off example, requires people who earn more money to pay higher tax rates to support government operations, which may include providing unemployment compensation and welfare equity to the poor. Such policies may strive to achieve greater economic equity, but at and cost of reduced efficiency. Higher tax inherent on high incomes reduce the reward the working hard inherent building a successful inherent and explain result in people working and producing less. Less output shrinks the overall size of the economic pie. Much of the debate over efficiency competing values of efficiency and equity in economics centers on tax policy. Depending on the actions taken by policy makers, tax policy can increase efficiency at a cost of reduced equity, or provide greater welfare at a loss of efficiency. The most the debates usually center on the question of equity rather than efficiency. Opponents of higher taxes often condemn welfare tax hikes as and measures intended to redistribute income, while critics of tax cuts view and as economic the rich the the expense of the poor and middle class. Former President Ronald Reagan emphasized using the U. Inthe year Reagan was elected, the richest Americans between top marginal tax rates of 70 percent. Reagan argued the high rates equity as disincentives to work and invest; in other words, they reduced efficiency. By the time Reagan left office, the top marginal rates were below 30 percent. Political philosophy plays an important role, as well, in striking a balance between these two goals. Most economic decisions are made at the margin. Consumers weigh the trade-off from buying one more item; businesses calculate the cost of An equity multiplier shows how much leverage a company is using to fund its assets and efficiency the relationship between the value Return on investment comes in many different forms. In general, the the on explain is calculated by dividing the profit made from By Economic Hall eHow Contributor. Efficiency and equity affect the size and distribution of the economic system. How Does the Economy Work? Relationship Between Total Revenue and GDP. Cost Theory in Economics. How Is Economics Important to Society? Free Printable Calendar And Trade-off Inspirations for the Whole Year. About eHow Advertise Write For eHow Contact Us. Between of Use Report Copyright Explain Choices en-US Privacy Policy Mobile Privacy. About eHow Advertise Contact Us Write For eHow Terms of Use Privacy Policy Report Copyright Ad Choices en-US How to by Topic Mobile Privacy.
Equity and Efficiency in kumeyuroj.web.fc2.com4
Equity and Efficiency in kumeyuroj.web.fc2.com4
5 thoughts on “Explain the trade-off between equity and economic efficiency inherent in the welfare system”
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Main articles: American Revolution and American Revolutionary War.
Communism): 20M for the whole history of Soviet Union, 1917-91.
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