Difference between revisions of "Efficiency vs. Equity"

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(Created page with "== Economic Efficiency == Pareto Efficiency Vilfredo Pareto Allocation so that no one can be made better off graph Microeconomic Definition of Maximization of Utility via Mini...")
 
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== Economic Efficiency ==
 
== Economic Efficiency ==
  
Pareto Efficiency  
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== Pareto Efficiency ==
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Vilfredo Pareto
 
Vilfredo Pareto
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Allocation so that no one can be made better off  
 
Allocation so that no one can be made better off  
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graph
 
graph
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Microeconomic Definition of Maximization of Utility via Minimization of Cost
 
Microeconomic Definition of Maximization of Utility via Minimization of Cost
  
failure to account for equity  
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== failure to account for equity ==
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"what if"...society can derive utility from equity...(MBequity>MCequity => Efficiency = Equity)
 
"what if"...society can derive utility from equity...(MBequity>MCequity => Efficiency = Equity)
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conflict of incentives, because someone can be made better off, they have an incentive to not support equity
 
conflict of incentives, because someone can be made better off, they have an incentive to not support equity
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cost effects of attempting (Effect on PPF, inhibit econ growth...$ could be used on capital)
 
cost effects of attempting (Effect on PPF, inhibit econ growth...$ could be used on capital)
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counterarg...$ used for equity has a higher effect on economic growth, spending chain, human capital
 
counterarg...$ used for equity has a higher effect on economic growth, spending chain, human capital

Revision as of 12:13, 31 May 2011

Economic Efficiency

Pareto Efficiency

Vilfredo Pareto

Allocation so that no one can be made better off

graph

Microeconomic Definition of Maximization of Utility via Minimization of Cost


failure to account for equity

"what if"...society can derive utility from equity...(MBequity>MCequity => Efficiency = Equity)

conflict of incentives, because someone can be made better off, they have an incentive to not support equity

cost effects of attempting (Effect on PPF, inhibit econ growth...$ could be used on capital)

counterarg...$ used for equity has a higher effect on economic growth, spending chain, human capital