Decisions About Balancing Equity Vs. Efficiency Should

question 3

Multiple Choice

Decisions about balancing equity vs. efficiency should

• A) always be in favor of efficiency
• B) always be in favor of equity
• C) depend upon the values the individual chooses to uphold
• D) be treated as equally important

---

Definitions:

Long Run

A period of time in economics during which all factors of production and costs are variable, allowing for full industry adjustment.

Diseconomies Of Scale

Situations where a firm's costs per unit increase as the scale of production increases, typically due to inefficiencies that arise from becoming too large.

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Diminishing Returns

A principle in economics that states as one input variable is incrementally increased, there comes a point when the rate of resultant output begins to decrease.