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Unformatted text preview: 11/11/2010 Econ Notes Criticism of Markets 1. 2. Markets do not produce a fair distribution of income- mal distribution of income 3. Markets are starting to produce externalities. The one thats most front and center in your generation is income distribution (cavalier daily). Markets are not producing the right income. Debates about income tax or high income earned in the US is whether or not it should be done away with. Modern welfare economics (Purdue founded this) was wrote at the time where the best way to allocate resources was through markets. Part of that view was that you should have to pay for those resources. However what is there was a difference between the private cost some firm incurs and the social cost (full social cost to society) or producing the good Purdue says even a perfectly competitive market (price = marginal cost) is not going to generate an efficient market....
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