6.5 Are Markets Fair?
MyEconLab Concept Video
Following a severe winter storm or hurricane, the prices of many essential items jump. Is it fair that disaster victims should be hit with higher prices? Many low-skilled people work for a wage that is below what most would regard as a living wage. Is that fair? How do we decide whether something is fair or unfair?
Economists have a clear definition of efficiency but they do not have a similarly clear definition of fairness. Also, ideas about fairness are not exclusively economic ideas. They involve the study of ethics.
To study ideas about fairness, think of economic life as a game—a serious game—that has rules and a result. Two broad and generally conflicting approaches to fairness are
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