Political Science 1020E Lecture Notes - Lecture 12: Communism, Externality, Pareto Efficiency
1 Jan 2016
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Exam review: fri, oct 24th 4:30-6:00pm ncb 101, exam 10 am. For utilitarian"s the idea of diminishing marginal utility suggest income should be distributed: a) happiest people b) relatively equally c) Minimizes net welfare d) without being taxed e) marginalized cultural groups. A pure capitalist free market: private property rights (right to do what you want with what you own, production for profit, distribution by voluntary exchange (supply/demand, free competition. A planned economy: state owns all major property, production for needs, not for profits, distribution by central allocation (state sets prices, state controls what gets produced (accordance to central plan) A modified free market (canada: some state-owned enterprises, some voluntary distribution (charity, sale of some goods is prohibited, some state-enforced monopolies. Want-satisfaction and pareto improvement (markets satisfy peoples wants) pareto= make both parties better off, without making one worse off. Pareto optimality/efficiency= cant make someone better off without making someone else worse off.
