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    Efficiency and Equity

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    1. Suppose two passengers both end up with a reservation for the last seat on a train from San Francisco to Los Angeles. Two alternatives are proposed.
    A) Toss a coin.
    B) Sell the ticket to the highest bidder.
    Compare the two from the standpoint of efficiency and equity.

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    Dear Student,

    Tossing a coin would be more fair and equitable. This is because the probability of success/ failure is equal for both. So in the justice point of view, tossing a coin ...

    Solution Summary

    Efficiency and equity is examined for two passengers ending up with a reservation for the last seat on a train.