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Outline for Friday, August 8
 Remember
   Quiz Monday
   Final Friday – don’t yet know where
 Review Thursday
 Quiz practi...
Pareto Efficiency
 A change is a Pareto improvement or is Pareto-
 superior if…
   Is anyone better off? YES
   Is anyone ...
Pareto Efficiency for market
interventions
 A Pareto improvement has
    CS>0 for some consumer or PS>0 for some firm or
 ...
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  1. 1. Outline for Friday, August 8 Remember Quiz Monday Final Friday – don’t yet know where Review Thursday Quiz practice Other pricing schemes General Equilibrium
  2. 2. Pareto Efficiency A change is a Pareto improvement or is Pareto- superior if… Is anyone better off? YES Is anyone worse off? NO A situation is Pareto efficient if no Pareto improvement exists It is inefficient if an improvement can be made
  3. 3. Pareto Efficiency for market interventions A Pareto improvement has CS>0 for some consumer or PS>0 for some firm or G>0 And CS0 for all consumers, PS0 for all firms, and G0 A welfare improvement has W = CS + PS + G > 0

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