Microecon Week 6 Flashcards
1
Q
An outcome is pareto efficient when…?
A
No one came be made better off without making someone else worse off
2
Q
Overall efficiency requires 3 conditions, what are they?
A
1) Efficiency in production
2) Efficiency in consumption
3) Efficient allocation of resources
3
Q
What is the first fundamental theorem of welfare economics?
A
A general competitive equilibrium is Pareto efficient, under standard assumptions
4
Q
What is the second fundamental theorem of welfare economics?
A
Under some assumptions, any Pareto efficient outcome is a competitive equilibrium
5
Q
A pure public good is a good which is both…?
A
1) Non-excludable
2) Non-rival
6
Q
If a good is both exclusive and rival, then it is…?
A
A private good
7
Q
If a good is rival but no exclusive, then it is…?
A
A common pool resource
