Question
true or false, explain if false
(f) Efficiency is related to the size of the economic pie, whereas equity is related to how the pie gets sliced and distribut
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Answer #1

f)

The given statement is true. By efficiency we mean the size of the economic pie and by equity we try to explain how the pie is divided among the citizens of the economy. A more equal division indicates equity.

g)

The free rider problem arises mostly for public goods where the number for beneficiaries or users of the good are large and by and large it is impossible to exclude a non payer to avail the services. Thus, the given statement is true.

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