A society can use competitive markets to achieve efficiency without sacrificing equity if it can:

Question

Quizplus · Accepted Answer

By changing the initial distribution of resources, a society can ensure a more equitable distribution of the benefits from competitive markets. This can be done through policies such as progressive taxation, government subsidies or transfer payments, and minimum wage laws. By addressing the unequal distribution of resources, the society can achieve both efficiency and equity. While deriving a social welfare function and reallocation of goods can also contribute to achieving equity, they are not specific to using competitive markets and may not necessarily lead to efficiency. Eliminating market failures may be necessary for efficiency but may not address equity concerns.

A Society Can Use Competitive Markets to Achieve Efficiency Without