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.

Question

Quizplus · Accepted Answer

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.

If in Equitania,20% of the Population Receive 80% of the Income