eco 202 powerpoints - Should price gouging be illegal? Do...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

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

View Full DocumentRight Arrow Icon
EYE ONS Should price gouging be illegal? Do price gougers take advantage of disaster victims? Or is a high price after a natural disaster just a sign that a market is doing its job of allocating scare resources to their best use?
Background image of page 2
Efficiency and Fairness of Markets 6 When you have completed your study of this chapter, you will be able to 1 Distinguish between value and price and define consumer surplus . 2. Distinguish between cost and price and define producer surplus . 3. Explain the conditions in which markets are efficient and inefficient. (video: efficiency) . 4. Explain the main ideas about fairness, equality, equal opportunity and equal excess and evaluate claims that competitive markets result in unfair outcomes. CHAPTER CHECKLIST
Background image of page 3

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

View Full DocumentRight Arrow Icon
Different methods of resource allocation Sharing equally When a resource is shared equally, everyone gets the same amount of it. In theory (Public goods) Lottery Lotteries allocate resources to those with the winning number, draw the lucky cards, or come up lucky on some other gaming system. Personal characteristics Personal characteristics allocate resources to those with the “right” characteristics. (marriage partners , preferential treatment to certain groups. Discrimination etc.) Force Dictators, theft, and government transfer wealth from the rich to the poor, or from the poor to the rich etc.
Background image of page 4
RESOURCE ALLOCATION METHODS Market price Buyers and sellers make decisions on their own Command For example, if you have a job, most likely someone tells you what to do. Your labor time is allocated to specific tasks by command. Majority rule Majority rule allocates resources in the way that a majority of voters choose. (Tax, public goods) Contest A contest allocates resources to a winner (Sports) First-come, first-served A first-come, first-served allocates resources to those who are first in line. Super market and waiting in line in the bank) wealth from the rich to the poor, welfare, etc.
Background image of page 5

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

View Full DocumentRight Arrow Icon
Wealth distribution in the united states 2007 The richest 20% earned 49% of total income.
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/05/2012 for the course ECO 202 taught by Professor Fairchild during the Spring '10 term at Northern Virginia Community College.

Page1 / 28

eco 202 powerpoints - Should price gouging be illegal? Do...

This preview shows document pages 1 - 7. Sign up to view the full document.

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