Working efficiently there is is underproduction

Info iconThis preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: is underproduction underproduction or overproduction overproduction Is the Competitive Market Fair? Fair? Two broad approaches: – It’s not fair if the result isn’t fair. • “Why should daycare workers earn so little?” – It’s not fair if the rules aren’t fair. • “Affirmative action is unfair to young men!” It’s Not Fair If the Result Isn’t Fair Fair • Utilitarianism – Equality is fair and efficient – Transfer income so no rich and no poor – The problem with utilitarianism is • Income taxes reduce incentive to work, so total “pie” shrinks • Administrative costs of transferring income It’s Not Fair If the Rules Aren’t Fair Aren’t • symmetry principle – the requirement that people in similar situations be treated similarly. • Requires – Laws that establish and protect property are enforced – Private property can be transferred only by voluntary exchange Market Alternatives Market • • • • • • • Command Majority rule Contest First-come, First-served Lottery Personal characteristics Force...
View Full Document

This document was uploaded on 03/14/2014.

Ask a homework question - tutors are online