Equity vs efficiency
What Equity vs efficiency means in Economics A-Level, as defined for AQA.
Definitions of Equity vs efficiency
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Reference: AQA
The trade-off where introducing market forces can improve efficiency, reduce waste and incentivise innovation, but often raises equity concerns and may exclude lower-income individuals from essential services.
A trade-off in which more equal distribution may reduce incentives for enterprise and hard work, while more unequal distribution provides strong incentives for risk-taking and capital accumulation.
Topics that use Equity vs efficiency
- How markets and prices allocate resources (AQA A-Level)
- The distribution of income and wealth (AQA A-Level)
Related terms
- Incentives
- Market failure
- Asset Ownership
- Asset Price Inflation
- Asymmetric information
- Economic efficiency
- Economic incentives
- Equality
Using Equity vs efficiency in the exam
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