Consider the statement: “There need be no tradeoff between
equality and efficiency. An ‘efficient’ economy that yields an
income distribution that many regard as unfair may cause those
with meager income rewards to become discouraged and stop
trying. So efficiency may be undermined. A fairer distribution
of rewards may generate a higher average productive effort on
the part of the population, thereby enhancing efficiency. If
people think they are playing a fair economic game and this
belief causes them to try harder, an economy with an equitable
income distribution may be efficient as well.” This statement
assumes that there is 1 a group of society that has become
discouraged and has stopped participating in the market. 2 equal
access to education and no job discrimination. 3 an income
redistribution system that benefits everyone. 4 an equal
distribution of the working age population.