Unit 5 Flashcards
1
Q
Allocation
A
Outcome of economic decision that decided who gets what and who does what
2
Q
Pareto efficient
A
If nobody can be better off without making someone worse off
3
Q
Kaldor hicks improvement
A
Those better off can compensate those worse off
4
Q
Coercion
A
Bruno dictator - decides what’s best for him
5
Q
When is economic rent maximised
A
When MRS = MRT
6
Q
What share would Bruno have under coercion
A
All of the surplus
7
Q
Property rights and transfers
A
No force but incentives and free trade will decide outcome
