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Efficiency-Equity Spectrum

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About This MicroSim

This MicroSim maps eight economic policies onto an efficiency vs. equity scatter plot, helping students understand one of the most fundamental trade-offs in economics. Each policy is positioned based on how well it promotes economic efficiency (maximizing total output) versus equity (fair distribution of resources). Students can click on any policy dot to read a description of its trade-offs, and they can place their own "ideal" marker to reflect their personal values.

How to Use

  1. Click on any policy dot to select it. A detail panel appears below the chart showing the policy name, its efficiency and equity scores, and a description of its trade-offs.
  2. Read the quadrant labels to understand the four regions: High Equity/High Efficiency (ideal), High Equity/Low Efficiency, Low Equity/High Efficiency, and Low Equity/Low Efficiency.
  3. Click "Place My Ideal" to enable placing a gold star marker on the chart. Click anywhere on the chart to position your ideal balance between efficiency and equity.
  4. Notice the dashed frontier curve which represents the approximate boundary of what is achievable -- policies above this curve would require extraordinary innovation.

Iframe Embed Code

You can add this MicroSim to any web page by adding this to your HTML:

<iframe src="https://dmccreary.github.io/economics-course/sims/efficiency-equity-spectrum/main.html"
        height="482px"
        width="100%"
        scrolling="no"></iframe>

Lesson Plan

Grade Level

9-12 (High School Economics)

Duration

10-15 minutes

Prerequisites

  • Basic understanding of what economic efficiency means (maximizing total output)
  • Basic understanding of what equity means in economics (fair distribution)

Activities

  1. Exploration (5 min): Click on each of the eight policy dots. For each, note its efficiency score, equity score, and which quadrant it falls in. Which policy scores highest on efficiency? Which scores highest on equity?
  2. Guided Practice (5 min): Compare Flat Tax and Progressive Tax. Explain why one scores higher on efficiency and the other on equity. Then compare Free Trade and Rent Control. Which would you recommend and why?
  3. Assessment (5 min): Place your "My Ideal" marker on the chart. Write a short paragraph explaining where you placed it and why, identifying which policies come closest to your ideal. Is it possible to have both maximum efficiency and maximum equity?

Assessment

  • Students can define the efficiency-equity trade-off and explain why it exists
  • Students can compare two policies and articulate their relative strengths on each dimension
  • Students can express and defend their own values regarding the balance between efficiency and equity

References

  1. Efficiency and equity - Wikipedia - Overview of the trade-off between economic efficiency and equitable distribution.
  2. Equity (economics) - Wikipedia - Explanation of different concepts of fairness in economics.
  3. Efficiency vs. Equity - Investopedia - Discussion of economic efficiency, Pareto optimality, and how equity considerations complicate policy choices.