Class Notes (811,690)
Canada (494,876)
Economics (582)
ECON 1050 (115)
H.Brand (15)

Lecture: Efficiency and Equity

6 Pages
Unlock Document

ECON 1050

Lecture 6 ECON1050 Page 1 MICROECONOMICS Efficiency and Equity Focus individuals make choices in their own selfinterestmarkets coordinate individuals choices in the hopes that they will benefit societydo markets produce a fair outcomeINTRODUCTION Efficient Market Hypothesisbelief that stocks will always trade at their fair value on the stock market ie the economy will selfregulatebelief in the Efficient Market Hypothesis that led to the market crash recession o it was determined that if everyone had done their jobs properly the recession would have been avoided o since Ronald Reagan people have wanted to get rid of government regulation o it doesnt work because people are greedy and so markets do not restore back to equilibriumGreat Depression occurred for similar reasons o Franklin Roosevelt put regulation methods in place to prevent it from happening again o 30 years later we tried to get rid of those regulationsled to 2008 crashResource Allocation Methods A Market Pricemarket allocates a scare resource o no demandno marketno supply o efficient allocation of resources is using resources to produce demanded goods to maximize revenue example field for potatoes or flowersthose who are willing to pay the market price get the productmost common method o individuals sell labour services in a market and buy most goods in a market o for most resources the market does a good job of allocationB Commandresources are allocated by someone in authority o example in a job a boss allocates your labour time by providing you with specific tasksworks well in organizations with clear lines of authority but poorly in an entire economy o example Czech hockey players came to Canada and sold crystal to Canadians cheaply then went and bought Levis nylons etc that they could not get under the command economy in the Czech Republic in a command economy individuals wants are unheededC Majority Rule
More Less

Related notes for ECON 1050

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.