One of the common mistakes people often make is to equate equality to efficiency. While equality can certainly enhance social efficiency, it can also lead to greater inefficiency. Confused? Perhaps a few examples will help you understand this concept a little bit better.
The first example is a simple one. A box of chocolates is to be shared by two children. The box contains 10 milk chocolates; both children like milk chocolates. Each child is given 5 chocolates. Well, it doesn’t take a rocket scientist to realize that the allocation of the chocolates is both fair and efficient.
The second example is bit more complicated; the numbers in this example have been normalized for greater clarity. There was a fruit sale at the local farmers market; my sister was able to buy 8 bananas and 4 mangoes. The bananas cost $1 each and the mangoes cost $5 each. My sister has two daughters, Julie and Christine. Julie loves to eat mangoes, while Christine loves to eat bananas. My sister doesn’t eat fruits.