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| Topic: |
English
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| Number of pages / Number of words: |
4 / 927 |
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Overcoming Pareto non-comparability: the compensation principle.
a?? Kaldor: state a is preferred to state b if the gainers from the move to state a can hypothetically compensate the losers so that everyone is better off.
a?? Hicks: state a is preferred to state b if the losers from the proposed move cannot hypothetically bribe the gainers not to make the move...
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Pareto optimality and the general equilibrium of a competitive economy.
a?? The first fundamental theorem of welfare economics: under certain assumptions the allocation of goods and factors resulting from a competitive equilibrium is Pareto optimal.
9. The first fundamental theorem of welfare economics requires:
a?? efficient exchange of goods and services ( [pic]
a?? efficient allocation of the factors of production ( [pic]
a?? efficient output choice (overall efficiency) ( MRS = MRT
10...
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