ECON 1050 Chapter Notes - Chapter 5: Robert Nozick, Externality, Redistribution Of Income And Wealth
8 Apr 2013
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Every time you buy something, you express your view about how scarce resources should be used. You make choices in your self interest. Market price: people willing and able to pay that price get the resource, those who don"t: people able but unwilling, and those who cannot afford. Contest: allocates resources to a winner, good when the efforts of players" are hard to monitor and reward directly, total output is greater be everyone works hard to be the winner. Lottery: allocates resources to those who pick the winning number, draw lucky card, etc. , on some gaming system, work best when there is no effective way to distinguish among potential users of a scarce resource. Personal characteristics: people with the right characteristics get the resources, some of the resources that matter the most to you are allocated most to you are allocated this way, ex/ marriage partner, allocating jobs to certain races.
