Equity_Efficiency

Question 1

refers to the optimal use of resources to maximize total welfare

Answer 1

Efficiency

Question 2

focuses
on the fair distribution of those resources among individuals and groups.

Answer 2

equity

Question 3

The idea that there is a tradeoff between efficiency and equity was the subject of an influential book (1975)
by _________ in which he labeled it ______

Answer 3

Arthur Okun

“The Big Tradeoff.

Question 4

In this book, who explores the conflicts that arise when society’s desire to reduce inequality would impair
economic efficiency.

Answer 4

Okun

Question 5

Okun argues that the pursuit of efficiency necessarily creates ______, and thus society
faces a_____between equality and efficiency.

Answer 5

inequalities

trade-off

Question 6

Okun emphasizes that institutions in a ____
encourage economic competition while also promoting social and political equality, creating tensions between
these two principles.

Answer 6

capitalist democracy

Question 7

In _____, there is said to be a tradeoff between efficiency and equity.

Answer 7

welfare economics

Question 8

The ______ occurs when maximizing the productive efficiency of the market or economy leads to less equitable
wealth distribution.

Answer 8

equity-efficiency
tradeoff

Question 9

Results when maximizing the efficiency of an economy leads to a reduction in its equity
— as in how equitably its wealth or income is distributed.

Answer 9

equity-efficiency
tradeoff

Question 10

often need to find a balance between these two goals, seeking to achieve both efficiency and
a degree of fairness in the distribution of resources.

Answer 10

Policymakers

Question 11

which are intended to maximize one
may negatively impact the other

Answer 11

Economic policies

Question 12

A _____might lead to a significant concentration of wealth, which could be seen as
inequitable.

Answer 12

highly efficient market

Question 13

Government interventions to promote equity, such as _______, can
potentially reduce economic efficiency.

Answer 13

progressive taxes or social programs

Question 14

refers to the optimal allocation of resources to maximize output and minimize waste.

Answer 14

Efficiency

Question 15

pertains to fairness and justice in the distribution of resources and wealth

Answer 15

Equity

Question 16

The purpose of _______is achieving the optimal allocation of resources where no individual can
be made better off without making someone else worse off (Pareto Efficiency)

Answer 16

economic efficiency

Question 17

seeks
fairness or justice in the distribution of economic resources and wealth.

Answer 17

economic equity

Question 18

addresses the question of how well the economy’s resources are used and allocated.

Answer 18

Efficiency

Question 19

deals with how society’s goods and rewards are, and should be, distributed among its different
members, and how the associated costs should be apportioned

Answer 19

equity

Question 20

Focus :Optimizing resource use to
maximize output.

Answer 20

Efficiency

Question 21

Focus : Ensuring fairness and equal access
to resources and opportunities.

Answer 21

Equity

Question 22

Goals : Minimize waste, reduce costs,
and increase productivity.

Answer 22

Efficiency

Question 23

Goals : Reduce inequality, promote justice,
and ensure equal treatment.

Answer 23

Equity

Question 24

Economic Effect: Encourages economic growth,
innovation, and
competitiveness.

Answer 24

Efficiency

Question 25

Economic Effect: Redistributes wealth, addresses poverty, and promotes social cohesion

Answer 25

Equity

Question 26

Policy Tools : Market mechanisms, deregulation, privatization

Answer 26

Efficiency

Question 27

Policy Tools : Progressive taxation, subsidies, affirmative action.

Answer 27

Equity

Question 28

Examples : Lean manufacturing, just-in time inventory management.

Answer 28

Efficiency

Question 29

Examples : Conditional cash transfers, universal healthcare, affirmative action.

Answer 29

Equity

Question 30

Challenges : May overlook social costs or environmental impacts

Answer 30

Efficiency

Question 31

Challenges : Can reduce incentives for innovation or work if not balanced with efficiency.

Answer 31

Equity

Question 32

Measurement : Productivity metrics, cost benefit analysis.

Answer 32

Efficiency

Question 33

Measurement : Gini coefficient, poverty rates, access to education/healthcare metrics.

Answer 33

Equity

Question 34

Tradeoffs : Often prioritizes growth over fairness, potentially widening income gaps

Answer 34

Efficiency

Question 35

Tradeoffs : May reduce economic efficiency if not implemented thoughtfully.

Answer 35

Equity

Question 36

Types of Efficiency

Answer 36

Productive efficiency. Allocative Efficiency.

Question 37

This occurs when an economy operates on its production possibility frontier. This means that goods and services are produced at the lowest possible cost, with no resources wasted.

Answer 37

Productive efficiency.

Question 38

This ensures that resources are allocated to maximize overall satisfaction in society. This means that the mix of goods and services produced matches consumer preferences.

Answer 38

Allocative Efficiency

Question 39

Productive and allocative efficiency can lead to:

Answer 39

▪ Lowered Production Costs. Efficiency reduces production costs, which can lead to lower prices for consumers. ▪ Increased Standard of Living. By minimizing waste, resources can be allocated more effectively, enhancing consumer purchasing power and living standards. ▪ Improved Economic Performance. Encourages innovation and competition, contributing to sustainable economic growth.

Question 40

Types of Equity

Answer 40

Horizontal Equity. Vertical Equity.

Question 41

is the ‘fair’ distribution of benefits across the population while equality – equal distribution of benefits across the population.

Answer 41

Equity

Question 42

Treating similarly situated individuals equally (e.g., people with similar incomes paying the same tax rate).

Answer 42

Horizontal Equity.

Question 43

Treating differently situated individuals differently (e.g., those with higher incomes paying higher tax rates).

Answer 43

Vertical Equity

Question 44

A market operating inefficiently is situationally known as a

Answer 44

market failure.

Question 45

Examples of market failure include:

Answer 45

▪ Market failure as a result of buyer or seller concentration ▪ Market failure as a result of poor seller or buyer decisions because of insufficient information ▪ Market failure that occurs from free riders who benefit from, but do not bear the full costs of, market exchanges ▪ Market failure through externality

Question 46

can lead to the distribution of a resource that is not distributed normally across the population.

Answer 46

Inequitable markets

Question 47

If a market is inequitable, market participants would likely not be provided:

Answer 47

Equal access to income ▪ Equal access to education ▪ Equal access to goods and services ▪ Equal access to housing

Question 48

is normally addressed through macroeconomic policy.

Answer 48

Inequity

Question 49

A macroeconomic policy consists of a combination of .

Answer 49

monetary policy and fiscal policy

Question 50

The common instruments utilized to manage inequity are:

Answer 50

▪ Income Taxes. ▪ Welfare Payments.

Question 51

are imposed on individuals and entities based on their respective taxable income.

Answer 51

Income taxes

Question 52

These are made by governments to help support members of society. Examples can include subsidized education, vocational training, and public housing.

Answer 52

Welfare Payments

Question 53

Efficiency. Simplifies tax structures, reduces exemptions, and lowers corporate tax rates to attract investments. ▪ Equity. Increases take-home pay for low-income earners through reduced income tax rates and expands VAT coverage to services consumed by higher-income groups.

Answer 53

Comprehensive Tax Reform Program (CTRP)

Question 54

Efficiency. Streamlines business registration and licensing processes to reduce bureaucratic hurdles. Equity. Encourages entrepreneurship across all income levels by making it easier to start businesses.

Answer 54

Ease of Doing Business Act (RA 11032)

Question 55

▪ Efficiency. Focuses on infrastructure development to enhance connectivity and economic growth. ▪ Equity. Creates jobs and improves access to markets for rural communities, reducing regional disparities.

Answer 55

Build, Build, Build (BBB) Program

Question 56

▪ Efficiency. Targets resources directly to the poorest families, ensuring they invest in education and health. ▪ Equity. Helps bridge the gap in access to basic services like healthcare and education for disadvantaged groups

Answer 56

Conditional Cash Transfer (CCT) Program (4Ps)

Question 57

▪ Efficiency. Streamlines healthcare delivery by ensuring all Filipinos have access to quality services. ▪ Equity. Provides financial protection to all citizens, especially the poor, against health-related expenses.

Answer 57

Universal Health Care (UHC) Act (RA 11223)

Question 58

Efficiency. Encourages businesses to offer discounts, which can attract more customers. ▪ Equity. Supports vulnerable elderly populations by providing them with financial relief.

Answer 58

Senior Citizen Discount and Privileges

Question 59

▪ Efficiency. Provides free tuition and other school fees for Filipino students in state universities and colleges. Increases access to higher education, potentially leading to a more skilled workforce. ▪ Equity. Reduces financial barriers for low-income students to pursue tertiary education.

Answer 59

The Universal Access to Quality Tertiary Education Act (RA 10931)

Question 60

Efficiency. Encourages modern farming techniques to increase productivity. ▪ Equity. Supports small farmers through subsidies and training, improving their competitiveness.

Answer 60

Agricultural Modernization Act (RA 8435)

Question 61

▪ Efficiency. Promotes the use of renewable energy sources, reducing reliance on fossil fuels. ▪ Equity. Encourages sustainable development that benefits future generations and vulnerable communities.

Answer 61

Renewable Energy Act (RA 9513)