6. Efficiency and Fairness of Markets. CHAPTER. It is more than probable that the average man could, with no injury to his health, increase his efficiency fifty percent. Walter Scott Novelist (1771 – 1832). C H A P T E R C H E C K L I S T.
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Efficiency and Fairness of Markets
It is more than probable that the average man could, with no injury to his health, increase his efficiency fifty percent.
(1771 – 1832)
3 Distinguish between cost and price and define producer surplus.
AllocativeEfficiency = Producing at highest-valued point on PPF
Production Efficiency = Producing at any point on PPF
Allocative efficient point is production efficient, but only one production efficient point is allocative efficient.
Marginal Benefit (REVIEW)
Marginal Cost (REVIEW)
Efficient Allocation (Allocative efficiency)
• Price and quantity regulations
• Taxes and subsidies
• Public goods and common resources