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| Equity is normative analysis while efficiency is positive analysis of economic systems. Not mutually exclusive, resources can be developed both equitable and desireable. |
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| All individuals with same characteristics should be treated equally |
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| All individuals with different characteristics should be treated differently |
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| Obtained when all individuals produce the same amount, consume the same amount, and exchange at the same price. |
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| Requires that all individuals are just as happy with their life |
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| Suppose all inidivudals had the same opportunity to earn same wages, buy same goods, etc. Opportunity to pursure and achieve are not the same concept. |
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| Arrows Impossibility Theorom |
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Definition
| No voting concept can exist that all criteria of equity is satisfied |
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