ECON 230D1 Chapter Notes - Chapter 10: Utility, Root Mean Square, Social Welfare Function
1 May 2017
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Pareto principle: a change that makes a person better off without harming anyone else is good. An allocation is pareto ef cient if any possible reallocation would harm at least one person. Partial-eq analysis: an examination of eq and changes in eq in one market in isolation. in contrast with general-eq analysis: the study of how eq is determined in all markets simultaneously. Multimarket-eq analysis only focuses on the relevant markets (like complements and substitutes, output and input, etc) Min wage causes q labor demanded to be less than s. however, in a gen-eq analysis, not always applied. When this happens, q in a covered sector goes down and goes up in an uncovered sector and becomes residual s curve. A common tool in general equilibrium analysis is the edgeworth box which allows the study of the interaction of two individuals trading two different commodities.
