Asked by Sayuri Yamane on Jul 22, 2024
Verified
Absent externalities and public goods, a perfectly competitive system is equitable.
Equitable
Characterized by fairness and impartiality; ensuring just treatment or distribution of resources without favoritism or discrimination.
Externalities
Economic side effects or by-products that affect an uninvolved third party; can be either positive or negative.
- Discern the difference between efficiency and equity in economic systems.
Verified Answer
SF
Skull ForgerJul 22, 2024
Final Answer :
False
Explanation :
Equity refers to fairness or justice in the distribution of resources or outcomes. A perfectly competitive system, absent externalities and public goods, can achieve efficiency (allocating resources where they are most valued) but does not inherently ensure equity. The distribution of wealth and resources in such a system can still be highly unequal, depending on initial endowments and other factors.
Learning Objectives
- Discern the difference between efficiency and equity in economic systems.
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