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Lecture

efficiency and equity.docx

3 Pages
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Department
Economics
Course Code
ECON 101
Professor
Wokia Kumase

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Sept.30 Efficiency and Equity Second mid-term: Chapter 5-8 Different economics systems follow different methods. Scare resources might be allocated by: 1. Market prices 2. Command Be used in most systems, especially in macroeconomics. 3. Majority rule We simply vote... And the government decides what to follow,considering the results of voting. 4. Contest People compete, and the winner gets the prize. 5. First-come,first-served The first person who approaches the resources gets it. Eg. Movie tickets, bus seats, the ATM machine, the highway 6. Sharing equality Pass and law to stress that those resources need to be allocated equally. 7. Lottery 8. Personal characteristics We use personal characteristics to make decisions. Eg. marriage 9. Force It could be used positively and negatively. It can be misused sometimes. Negatively use of forces to allocate resources: some nations have strong military power and they deprive the resources from other weak nations. Positively use of forces to allocate resources Demand,willingness to pay and value What you pay to consume another unit of goods is the willingness(marginal benefit). So the demand curve is also a willingness
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