_Lecture_11

_Lecture_11 - Lecture 11 Review so far • consumer choice...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Lecture 11 Review so far • consumer choice • production Now we want to integrate this. 1 Markets: Introduction We consider a market with • several commodities • several/many consumers • several/many producers/firms Our objects • define price-taking/competitive equilibrium • show equilibrium production/consumption is ’efficient’ ’Efficient’ means: It is not possible to rearrange production and consumption and make everyone better off. Efficiency in this sense is frequently called Pareto optimality . Efficiency entails • ’right’ outputs (right things/right amounts) are produced • outputs are produced in the ’right’ way ( productive efficiency ) – not possible to use same total inputs and produce more output – not possible to use less total inputs and produce same output • consumption is allocated to the ’right’ consumers ( allocative efficiency ) – not possible to rearrange total consumption and make all con- sumers better off We will eventually show that price-taking/competitive equilibrium is...
View Full Document

This note was uploaded on 04/01/2010 for the course ECON Econ 11 taught by Professor Mcdevitt during the Fall '07 term at UCLA.

Page1 / 4

_Lecture_11 - Lecture 11 Review so far • consumer choice...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online