PAM 2300 Lecture Notes - Lecture 5: Pareto Efficiency, Mecha, Price Fixing

• School: Cornell University
• Department: Policy, Analysis and Management
• Course: PAM 2300
• Professor: Rosemary Avery

Document Summary

How do you decide the gravity of risks. Private schools typically perform better than public schools. Free markets will provide: and allocate goods and services most efficiently in any society. Producers are make what they want and consumers can consumer what they want. Provide and distribute goods and services better than any other market mech and are perfectly. Efficient if sellers are unconstrained buyers are unconstrained buyers and sellers exchange buy trying to maximize. Pareto optimal: when the asking price matches exactly with what the seller offers. Concept that rarely exists in market but something to strive for. (surplus/ deficit) Pareto efficiency is an important criterion for evaluating economic systems and public intervention on public goods. Competition among buyers assures that goos and services will be allocated with the desires of the buyers. Govt should then only be in business of income distribution/ redistribution since competition would allow the system to be efficient: full information.