econ434notes37c

econ434notes37c - PPF, how can we get up to it? Cheng...

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Ax X Y Ay By Bx A B Contract Curve Represents the distribution of good A and B between X & Y, so that any other distribution would be ineffective. Efficient Exchange. Cheng November 21, 2005 Notes Voting- Median voter Dictatorship= disenfranchisement Wicksell Unanimity- if we have to have unanimity, then no one can lose Along the contract curve we have: MUa/ MUb (x) = MUa/ MUb (y) If we follow Wicksell then everyone gains. Pareto optimum. A Democratic majority can create a net loss for the minority. Multiple equilibriums A Uy Ux A-If we were inside of this utility
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Unformatted text preview: PPF, how can we get up to it? Cheng November 21, 2005 Notes How can we make it fair? James Buchanan- looked at these utility issues. Decided that we cant come up with the best distribution. -What we have to have are the rules, so that our procedures are fair.-We have a huge problem trying to resolve things politically. If we all get the same thing then we have no incentive to do anything. Huge procedural problem. 99:1 50:50 1:99 All of these are efficient but which is the social preference?...
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This note was uploaded on 01/12/2010 for the course ECON 434 taught by Professor Byrns during the Spring '09 term at UNC.

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econ434notes37c - PPF, how can we get up to it? Cheng...

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