ECON301 Lecture Notes - Lecture 6: Edgeworth Box, Vilfredo Pareto, Indifference Curve

• School: University of Waterloo
• Department: Economics
• Course: ECON301
• Professor: Corey Van De Waal

Document Summary

Vilfredo pareto (1848 1923) was born in paris to an italian father and a french mother. He became interested in economics only after a successful career in industry. In 1893, he was appointed as a professor of political economy (the post previously held by leon walras) at the universite de. We are primarily concerned with pareto theory in the context of what it adds to. Recall that walrasian general equilibrium theory incorporates three equilibrium concepts, namely, consumer equilibrium, producer equilibrium, and market equilibrium. The key that holds these three equilibrium concepts together is the fundamental concept of market prices. [1] existence of general equilibrium: how do we ascertain that there exists an equilibrium price vector which can simultaneously satisfy the following conditions: Now, to answer any of these questions, we need to understand what is meant be the (cid:449)o(cid:396)d (cid:862)best(cid:863) and this is exactly the question which pareto optimal theory is trying to clarify.