Chapter 5 - Property And Power

Question 1

Surplus

Answer 1

The sum or the consumer and producer surpluses.

Question 2

Power

Answer 2

The ability to do (and get) the things one wants in opposition to the intentions of others.

Question 3

Bargaining Power

Answer 3

The extent of a person’s advantage in securing a larger share of the rents make possible by an interaction.

Question 4

Pareto efficiency

Answer 4

Ah allocation with the property that there is no alternative technically feasible allocation in which at least one person would be better off, and nobody worse off.

Question 5

Pareto Inefficiency Curve

Answer 5

The set of all allocations that are Pareto efficient. Often referred to as the contract curve, even in social interactions in which there is no contract, which is why we avoid the term.

Question 6

Economic Rent

Answer 6

A payment or other benefit reveries above and beyond what the individual would have received on the next best alternative (or reservation option).

Question 7

Substantive Judgements Of Fairness

Answer 7

Judgements based on how the characteristics of the allocation itself, not how it was determined.

Question 8

Procedural Judgements Of Fairness

Answer 8

An evaluation of an outcome based no the characteristics of the outcome itself, (for example how unequal it is), but on those the allocation came about.