Question

1. v) Why efficiency is a commonly used as an objective for public policy (more than equity). (Hint: think about which type of policies will be easier to pass in the congress?) vi) One hundred people are distributed in two beaches. In Beach A, there are 98 people (A = 98), while in Beach B only 2 (B = 2). Is this allocation efficient? Is equalitarian? (assume that people are more happy if the beach is less crowded). vii) Answer to the same questions with (A = 100, B = 0) and with (A = 50, B = 50). viii) Find an allocation that is NOT Pareto efficient an NOT equalitarian (Hint: you might need more than one beach).

Answer 1

v) Public policy is a state or country matter which gets implemented on every citizen or a particular class of citizens. The government give preference to those policies which do not create a scenario of unrest among the population. The most disturbing element in policy is when there is a section of inequity among different class or caste or gender. If such happens then the public unrest is majorly seen among the population, but if the government take the steps in such a way that the implementation is efficiently done among the population benefitting the focussed class and not hampering the other, such approach is more encouraged rather than continuing in an unlikely manner.

vi) WIth Beach A having 98 people and Beach B having 2 people, this kind of distribution is not equalitarian because in the equalitarian condition because as given in the question that people enjoy less crowded beaches and with one beach being overcrowded and another one being very less crowded, the people are not getting the equalitarian treatment.

vii) When there are 100 people on beach A and 0 on beach B then this isn't equity. When we take the situation of 50 on beach A and 50 on beach B then we can say that the people are getting equal treatment.

In this whole situation, we cannot classify people in any term or we can make equity on the basis of any kind of class, caste or gender. The people who go on the beach are all equal and can be easily measured in simple quantity. When it come to bringing them on the beach in such a way there is less crowd there then there should be equal distribution of people (irrespective of where they come from and who they are) on both the beaches.

viii) Pareto efficiency is the one where the economy cannot change efficiency without making someone worse off, but in the given case there shouldn't be Pareto efficiency, nor the equalitarian situation, so the economy can change the efficiency without making someone worse off without following the equalitarian situation. This can be given through the example by taking 3 beaches, 2 out of which are open to public and the third one is private beach for the residents residing there so it gives more opportunity to the people who have beachside residents and are not equivalent to the other people, The other 2 beaches will be having more of the population which can eaither 98-2 or 100-0 or 50-50.