Chapter03规范分析工具.pptVIP

CHAPTER 3 TOOLS OF NORMATIVE ANALYSIS Welfare Economics Welfare Economics – branch of economic theory concerned with the social desirability of alternative economic states Edgeworth Box Indifference curves in Edgeworth Box Making Adam better off without Eve becoming worse off Making Eve better off without Adam becoming worse off Making both Adam and Even better off Starting from a different initial point The Contract Curve Pareto Efficiency in Consumption MRSaf = MRSaf Production Possibilities Curve Marginal Rate of Transformation MRTaf = Marginal rate of transformation of