罗森财政学第九版第三章课件.pptVIP

* Axes and labels 1st click – PPC and labels 2nd click – lines x and w 3rd click – lines z and y * * * Each line wipes right after click * Box and dimensions initially set 1st click – contract curve drawn from lower left to upper right and “The contract curve” and arrow appear * Axes and labels 1st click – Utility possibilities curve, p3 and p5 2nd click - q * Axes and labels 1st click – the arrow (speed: medium) and “Increasing social welfare” * Axes, labels, and social indifference curves 1st click – utility possibilities curve and points * * 3-* CHAPTER 3 Tools of Normative Analysis Copyright ? 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Welfare Economics Welfare Economics – branch of economic theory concerned with the social desirability of alternative economic states Edgeworth Box Adam Eve 0 0’ s r Apples per year Fig leaves per year v w u y x Indifference curves in Edgeworth Box Adam Eve 0 0’ s r Apples per year Fig leaves per year A1 A2 A3 E1 E3 E2 Making Adam better off without Eve becoming worse off Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Ah Ap Eg g h p A Pareto Efficient Allocation Making Eve better off without Adam becoming worse off Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Eg g p1 p Ep1 A Pareto Efficient Allocation Making both Adam and Eve better off Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Eg g p1 p Ep2 Ap2 p2 Pareto efficient Pareto improvement Starting from a different initial point Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Eg g p1 p Ep2 Ap2 p2 p3 p4 k The Contract Curve Adam Eve 0 0’ s r Apples per year Fig leaves per year Ag Eg g p1 p Ep2 Ap2 p2 p3 p4 The contract curve Pareto Efficiency in Consumption MRSaf = MRSaf Adam Eve Production Possibilities Curve Apples per year Fig leaves per year C C 0 w y x z │Slope│ = marginal rate oftransformation Marginal Rate of Transformation MRTaf = Marginal rate of transformation of app