Which of the following is an example of an efficiency-equity trade-off faced by economic agents?
A)According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is not cost-effective. Instead of allocating resources to states in proportion to reported AIDS cases, resources should flow first to those activities that prevent more infections per dollar and then to less and less effective combinations of programs and populations until funds are exhausted, even if it means that some populations would be left without any prevention services.
B)Concerned about the falling birth rate, the French government has pledged more money for families with three children, in an effort to encourage working women to have more babies.
C)Some U.S. colleges are actively recruiting foreign students for their technology-based programs.
D)All New York City art museums are considering adopting a free-admission policy for local residents one weekend per month.

Question

Quizplus · Accepted Answer

The example given in option A shows an efficiency-equity trade-off as it suggests reallocating resources to achieve maximum prevention of HIV infections per dollar spent, even if it means some populations would be left without any prevention services. This involves a trade-off between efficiency (maximizing prevention per dollar spent) and equity (ensuring everyone has access to prevention services). Option B is an example of a policy aimed at increasing birth rates, and option C is an example of international recruitment for a specific purpose, neither of which involves an efficiency-equity trade-off. Option D is an example of a policy aimed at increasing access to museums, but it does not involve a trade-off between efficiency and equity.

Which of the Following Is an Example of an Efficiency-Equity