PHL295H1 Lecture Notes - Lecture 3: Memory Stick
Document Summary
Mathematical proofs shows the market will be good under certain conditions- perfect. No metropolis: parto- efficiency: cannot improve the position of 1 person without making a person least wealthy, parto- improvement: improving the position of 1 person without affecting another person"s wealth. Difference: liberty based- economy liberties are good even though they reduce the total wealth: efficiency based- committed to efficiency there will be more liberty constraints but it wont undermine the total wealth. Trade offs: if we give more liberties there will be a negative impact on efficiency (wealth) and vice versa. Imperfect market: trust confirmations: freeman and gatheure accepts this, beyond p. e market outcomes. Firm: bigger category- organizations that appear in markets- corporation is a specific type of firms: why firms emerge and how they transform. Economy exchanges in a corporation-ex. receive a salary, to do work in the company.
