Asked by Rahaf Aldabain on Apr 28, 2024
Verified
If in Equitania,20% of the population receive 80% of the income and the remaining 80% of the population receive 20% of the income,Equitania's economy:
A) is efficient.
B) cannot be efficient since efficiency requires a more nearly equal distribution of income.
C) may be efficient.
D) is neither efficient nor equitable.
Equitable Distribution
a principle aiming for a fair allocation of resources, wealth, or income among members of a society.
Efficient
Refers to the optimal use of resources to achieve the desired ends with minimal waste or effort.
Income
The amount of money received by an individual or entity in exchange for labor or through investments over a certain period.
- Understand the concept of efficiency in an economy and how it is defined.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
C
Explanation :
Efficiency in an economy refers to how well resources are used to produce goods and services, not necessarily how income is distributed. Therefore, even with a skewed income distribution, an economy can still be efficient if it is producing goods and services in the most effective way possible.
Learning Objectives
- Understand the concept of efficiency in an economy and how it is defined.