chapter 5 econ

chapter 5 econ - Chapter 5:Efficiency and Equity Main...

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1 Chapter 5:Efficiency and Equity Main Concepts: ± Define efficiency ± Consumer Surplus ± Producer Surplus ± Efficiency vs. Equity Cases for chapter 5: ± Regulation of food prices ± Text Book Market (Aplia) ± Regulation of Senior Executive pay
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2 Efficiency and the Social Interest 1. Efficiency in Production Produce without wasting resources: on the PPF. 2. Efficient allocation of resources: Produce the goods and services that people value most highly: the right point on the PPF. 3. Pareto Efficiency It is not possible to make one party better off without making another worse off. 1. Efficiency in Production 2. Efficient allocation of resources 3. Pareto Efficiency 4. Maximizing Total Welfare
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3 From Chapter 2: Marginal Benefit Marginal benefit is the benefit a person receives from consuming one more unit of a good or service. Measure the marginal benefit: by the dollar value of other goods and services that a person is willing to give up to get one more unit of it. Value, Price, and Consumer Surplus
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This note was uploaded on 11/04/2009 for the course MUSIC 021 taught by Professor Gray during the Spring '09 term at UPenn.

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chapter 5 econ - Chapter 5:Efficiency and Equity Main...

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