Which of the Following Is Not an Example of an Efficiency-Equity

question 133

Multiple Choice

Which of the following is not 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)The growing demand for corn by ethanol producers has led to a surge in the price of tortillas,a staple in the Mexican diet.To quell public outcry over rising tortilla prices,the Mexican government released government corn stocks at prices well below the market,and pressured states to impose price ceilings on tortillas.
• D)Some U.S.colleges cut back on merit scholarships since these programs siphon money from need-based programs,thus harming lower-income students with greater financial need.

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Definitions:

Discount Rate

An interest rate that the Federal Reserve charges banks for short-term loans, influencing economic activity by setting the cost of borrowing money.

Cash Discounts

A reduction in the invoice price offered by sellers to buyers for prompt payment of their bill.

Interest Days

The number of days over which interest is calculated on a loan or investment.

Non-Interest-Bearing Note

A financial instrument that does not accrue interest over time, meaning the borrower pays back only the principal amount borrowed.