EEP101_lecture3 - Chapter3: WelfareEconomics General...

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    Chapter 3:  Welfare Economics General Analysis Overview Welfare under Monopoly Welfare under Monopsony Welfare under Middlemen
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    General Analysis Overview Welfare analysis is a systematic method of evaluating economic implications of alternative allocations. It answers the following questions: 1. Is a given resource allocation efficient? 2. Who gains and who loses under various resource allocations? By how much? Welfare economics : A methodological approach to assess resource allocations and establish criteria for government intervention. Partial analysis : Evaluates outcomes in a subset of markets assuming efficiency in others.
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    Graphs of Demand and  Supply D = demand curve S = supply curve Area under demand curve ABC 0 = gross Area under supply curve 0 ELM =cost benefits from consumption. of production. ABP = consumer surplus =area between PLM =producer surplus =area demand and price. between price and supply
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    Efficient outcome When there are no  externalities, an 
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This note was uploaded on 03/18/2010 for the course ECON C125 taught by Professor Zelberman during the Spring '09 term at University of California, Berkeley.

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EEP101_lecture3 - Chapter3: WelfareEconomics General...

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