Why Does Economic Efficiency Not Always Result in Fair and Equal

question 196

Multiple Choice

Why does economic efficiency not always result in fair and equal treatment?

• A) Efficiency demands cost-minimization, which may cause the nonproduction of expensive items or adjustments designed to ensure that disadvantaged members of society are catered for.
• B) Market efficiency requires that only profitable goods be produced in order to maximize the return from using scarce resources, and some goods for the disadvantaged may not always yield profits.
• C) Market efficiency does not always allow firms to hire disadvantaged members of society so labor and governments sometimes have to step in to demand hiring of some of these individuals.
• D) All of these explanations are correct.

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Definitions:

Fabrication Department

A section within manufacturing focused on constructing parts or products by cutting, shaping, and assembling components.

Service Costs

Expenses incurred in delivering services to customers, including labor, materials, and overhead related to the service operation.

Return on Investment

A financial performance measure used to evaluate the efficiency or profitability of an investment, calculated as the net profit divided by the cost of the investment.

Investment Opportunity

An asset or item that can potentially generate a significant return or profit through appreciation, dividends, or interest.