ECO 1102 Lecture Notes - Lecture 10: Margarine, Ceteris Paribus, Competitive Equilibrium

• School: University of Ottawa
• Department: Economics
• Course: ECO 1102
• Professor: Octavian Strimbu

Document Summary

The government usually aims at some social objectives when implementing public policies: these social objectives are linked to notions of social justice, political philosophy. A social organization is just: if the original appropriation is fair, transfers between individuals are free, there is compensation for past injustice. Nozick argues that an economic allocation is just if the procedure that generates this allocation is just. He considers that the distribution of income or other economic advantages (consequence) is not relevant for the analysis of social justice. Utility: level of satisfaction of an individual consuming a basket of goods. Pareto optimum: a feasible allocation is pareto optimal if there is no other feasible allocation such that the utility of one individual increases without decreasing the utility of anyone. Pareto improvement: a modification to a given economic allocation for which no one has a decreased utility.