Topic 04 Efficiency & equity

Question 1

consequentialism

Answer 1

something is right or wrong based on consequence of real events

Question 2

non-paternalism

Answer 2

what’s right or wrong for you may not be the same for others, subjective

Question 3

pareto improvement

Answer 3

changing the outcome helps someone without putting anyone else at a disadvantage

Question 4

pareto efficient

Answer 4

no pareto improvement is possible
any change makes at least one agent worse off

Question 5

maximin pareto efficient

Answer 5

highest minimum of all the options given refer to table 4.2

Question 6

envy-freeness

Answer 6

equality
may not be pareto efficient-destroying everything would make it envy-free but nt destroying anything means pareto improvement and vice versa

Question 7

utility possibility set

Answer 7

all utility levels that are feasible

Question 8

utility possibility frontier/pareto frontier

Answer 8

utility levels that are pareto efficient figure 4.1 PPF thing

Question 9

social welfare function

Answer 9

the total of individual utilities ranked in terms of welfare

Question 10

utilitarianism

Answer 10

maximises the sum of utilities (total utility is highest)
ignores uneven/unfair distribution of utility

Question 11

how can utilitarianism promote equality

Answer 11

taking from the rich since their MU is falling makes them more grateful therefore more happy, distributing to the poor allows them to be happy

Question 12

egalitarianism

Answer 12

equality of outcomes eg with lorenz curve/gini coefficient

Question 13

maximin/rawlsian welfare function
justified how?

Answer 13

strongest concern for the least well off member (greatest minimum)
if you didn’t know what level of income you had, you’d opt for having a fair level of income to ensure you minimise the worst possible outcome -john rawls