ECO100Y5 Lecture Notes - Lecture 3: Political Philosophy, Externality, Economic Surplus
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ECO100Y5 Full Course Notes
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A question of allocation (who gets what) This can be for consumers as well. How to allocate scarce resources goes back to the origins of economics as a philosophy. To study these problems we have to: Many think equal allocation is the best. Satisfies a common notion of equity (fairness) Implicit in any judgement about welfare will be these types of considerations. These are ultimately judgements a society, not economists have the right to decide. Often these judgements are explicit in problems economists study, but it makes the notions more complex, so we will leave them implicit. We may desire to treat everyone equally, but they themselves have different needs. The outcome that seems efficient to us is sometimes achieved naturally, there is sometimes no need for any kind of central organizing. Questions that discuss these issues contemplate the role of government. Going forward, allocations will be achieved through a mixture of market mechanisms (automatic) and government interventions.
