The difference between equality and equity in relation to the distribution of income and wealth
Equality means everyone gets the same share of income or wealth. Equity means everyone gets a fair share — which may not be equal.
Real World
The UK's progressive income tax system taxes higher earners at 40% or 45% while lower earners pay 20%, reflecting an equity principle — that those with greater ability to pay should contribute proportionally more, even though this is not equal treatment.
Exam Focus
Define both terms precisely at the start: equality = identical shares; equity = fair shares according to need or contribution — never use them interchangeably.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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