(财政学罗森第九版英文课件)Chap003Tools of Normative Analysis教学讲义.pptVIP

* Axes and labels 1st click – PPC and labels 2nd click – lines x and w 3rd click – lines z and y * * * Each line wipes right after click 3-* CHAPTER 3 Tools of Normative Analysis Copyright ? 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Welfare Economics Welfare Economics – branch of economic theory concerned with the social desirability of alternative economic states Edgeworth Box Adam Eve 0 0’ s r Apples per year Fig leaves per year v w u y x Indifference curves in Edgeworth Box Adam Eve 0 0’ s r Apples per year Fig leaves per year A1 A2 A3 E1 E3 E2 Making Adam better off without Eve becoming worse off Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Ah Ap Eg g h p A Pareto Efficient Allocation Starting from a different initial point Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Eg g p1 p Ep2 Ap2 p2 p3 p4 k The Contract Curve Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Eg g p1 p Ep2 Ap2 p2 p3 p4 The contract curve Pareto Efficiency in Consumption MRSaf = MRSaf Adam Eve Production Possibilities Curve Apples per year Fig leaves per year C C 0 w y x z │Slope│ = marginal rate oftransformation Marginal Rate of Transformation MRTaf = Marginal rate of transformation of apples for fig leaves MRTaf = MCa/MCf Efficiency Conditions with Variable Production MRTaf = MRSaf = MRSaf MCa/MCf = MRSaf = MRSaf Adam Eve Adam Eve The First Fundamental Theorem of Welfare Economics MRSaf = Pa/Pf MRSaf = Pa/Pf MRSaf = MRSaf MCa/MCf = Pa/Pf MRTaf = Pa/Pf Pa/Pf = MCa/MCf Adam Eve Adam Eve Efficiency versus Equity Adam Eve 0 0’ s r Apples per year Fig leaves per year q p5 p3 Utility Possibilities Curve Eve’s utility Adam’s utility U U p3 q p5 Social Indifference Curve Eve’s utility Adam’s utility W = F(UAdam, UEve) Increasingsocialwelfare Maximizing Social Welfare Eve’s utility Adam’s utility i ii iii Market Failure Market Power Monopoly Nonexistence of Markets Asymmetric information Externalit