ECO100Y5 Lecture Notes - Lecture 4: Economic Surplus, Demand Curve, Political Philosophy
53
ECO100Y5 Full Course Notes
Verified Note
53 documents
Document Summary
Back to the basics: economics is the study of scarcity, which is a question of allocations (who gets what). How to allocate scarce resources goes back to the origins of economics as political philosophy. Many will think the equal allocation is the best, as it satisfies a common notion of equity. Implicit in any judgement about welfare will be these types considerations: These are ultimately judgements a society, not economists, have the right to decide. Often these judgements are explicit in problems economists study, but it makes the solutions more complex so we"ll leave it implicit. We may desire treat everyone equally, but they themselves have different needs. Suppose there is a crowd of people and a singer using an omnidirectional speaker. You can hear her (faintly) in all directions. The outcome that seems efficient to us is achieved naturally. No need for any kind of central organizing mechanism. In plaintown, everyone loves to look at roses.
