Vaishali Parekh

Econ 160

10/5/10

1.All societies face a trade off between the two because economies want to be

well off therefore it creates government policies in order to create a more equal

distribution of goods. When this occurs societies are no longer at their maximum

efficiency and therefore there are issues such as DWL.

2. The US should not try to increase equity at the cost of efficiency. By trading

efficiency for equity the US effectively has market failures since there is DWL,

which in effect have negative outcomes for society. However efficient societies in

effect are more inequitable.