Question

Are all efficient outcomes also​ equitable? Explain. A. ​No, the only efficient outcome that is equitable is the one that results in an equal distribution of goods across society. B. There is really no definitive answer to this question since issues surrounding efficiency and equity are the domain of normative​ economics, where subjective value judgments are made. C. ​Yes, if an outcome is​ efficient, then by​ definition, it maximizes social surplus and consequently must be equitable. D. ​No, only those efficient outcomes that produce a​ rich-to-poor income ratio less than 5.0 are equitable.

Answer 1

B. There is really no definitive answer to this question since issues surrounding efficiency and equity are the domain of normative​ economics, where subjective value judgments are made.

Step-by-step explanation:

When it comes to efficiency and equity, there is not absolute answer that can be given. This is because the concepts are in the realm of "normative ethics." Normative ethics discusses what a person ought to do. However, the answers depend on a great variety of subjective factors. For example, when we talk about efficiency, do we refer to the efficient outcome for everyone, or just for ourselves? Moreover, when we talk about equity, many questions arise. Does everyone deserve the same? Is only perfect equality equitable? There is no easy answer to these questions, and therefore, we cannot definitely state whether all efficient outcomes are also equitable.