ECON BC 2075y Lecture Notes - Lecture 6: Boko Haram, Pareto Efficiency, Pareto Principle
27 Sep 2016
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Multiple choice---> slides and readings (understand concepts in slides) Short answer will be just like the homework. Can post questions by 5pm on monday on discussion board. Voting paradox and (condorcet) arrow"s impossibility theorem, X" is pareto improvement over y if nobody prefers y to x and at least 1 person prefers x to y. Pe: no more pareto improvement can be made. Limited scope of pareto efficiency- very rare. Increase range of welfare economics: formal theories of social choice. Doesn"t say much- inefficiency=some improvement can be made. Justification for cost-benefit analysis (can winners compensate the losers- willingness to pay) Ex: summers example- by wtp, dumping toxic waste in ldcs without paying compensation is a potential pi. Discussed pe and its problems, how limited it is as a theory of wellbeing- expand range of welfare economics with social choice theory. Why majority voting not a great way of satisfying society"s preferences and distributing things.
