This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: members of society. Equity the fairness of distribution of well-being among the members of society. The question of efficiency is whether the pie is as big as possible. The question of equity is whether the pie is divided fairly. Equity involves normative judgments and is harder to determine than the positive quality of efficiency. Laissez faire the economic policy of free market, literally it means allow them to do. Market power the ability to influence market prices Externalities side effects that affect people who do not purchase the good, they can be positive or negative and can cause market failure (the misallocation of resources.)...
View Full Document
- Spring '07