What Is Allocative Efficiency?

The importance of efficiency in the distribution and the maintenance of fairness, efficiency and fairness, efficiency and fairness are a pair of contradictions, which seem to be irreconcilable, but interdependent. Therefore, the relationship between efficiency and fairness must be handled correctly.

Distribution efficiency

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The meaning of efficiency in distribution and maintaining fairness, efficiency and fairness, efficiency and fairness are a pair

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Without inefficient fairness, there can be no inefficient efficiency. "Efficiency comes first, and fairness is taken into account." This principle emphasizes the allocation of resources. But when the maximum output is obtained with the smallest input, we say that the allocation of resources is efficient. In the pursuit of efficiency, China's resources have been optimized and the output has been greatly increased, so the economy can develop rapidly. This is worthy of recognition. In our country, resources are limited. The excessive occupation of resources by some people will inevitably lead to a reduction in the occupation of some human resources. Therefore, although the overall efficiency has increased and the income has increased, the portion of the income that does occupy too much of the resources does not benefit much in the process. However, efficiency is for better fairness, and fairness is for greater efficiency. Fairness is not only a prerequisite for efficiency, but also the key to efficiency improvement. First, taking our country as an example, economic development is inseparable from social stability, and fair treatment of income is the key to ensuring stability; how does fairness promote efficiency? We see that high-income people will save the remaining income after a certain amount of consumption; the increase in savings reduces interest rates and the investment is booming; investment brings a huge supply, but the market demand has not increased accordingly. If aggregate supply exceeds aggregate demand, then the problem of overproduction occurs. At this time, the efficiency of market allocation is very low. If we attach importance to fairness and increase the income of low-income people, they can increase their purchasing power, thereby increasing market demand, restoring market supply and demand, and improving efficiency. How should we deal with the relationship between efficiency and fairness at this stage? We should adhere to the principle of "fairness first, and efficiency."

1. The widening gap between the rich and the poor is unstable.

2. Mentioned that the treatment level of vulnerable groups can enhance their purchasing power and increase market demand.

3. While paying attention to fairness, efficiency should also be considered. Inefficient fairness will fail.