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PARETO EFFICIENCY: A type of efficiency that results if one person can not be made better off without making someone else worse off. Named after Vilfredo Pareto, this criterion is the guiding theoretical notion of efficiency used in the study of economics, especially welfare economics. Pareto efficiency is generally not attained if some resources are idle or unemployed. By engaging idle resources in production, some people can have more production without reducing that available to others. A problem with Pareto efficiency, however, is that it is based on the existing distribution of income and wealth. This is one of two noted efficiency criteria used in economics. The other is Kaldor-Hicks efficiency.
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Lesson Contents
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Unit 1: Price Taker |
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Unit 2: Short-Run Output |
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Unit 3: Doing Graphs |
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Unit 4: Long-Run Equilibrium |
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Unit 5: Evaluation | |
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Perfect Competition
- The first unit of this lesson, Price Taker, begins this study with a look at the general structure of a perfectly competitive market.
- In the second unit, Short-Run Output, we take a look at the short-run production decision faced by a perfectly competitive firm based on the cost and revenue numbers.
- The third unit, Doing Graphs, then looks at the short-run production decision faced by a perfectly competitive firm using a graphical analysis of cost and revenue.
- In the fourth unit, Long-Run Equilibrium, we examine the nature of long-run adjustment by a perfectly competition industry when all inputs are variable.
- The fifth and final unit, Evaluation, then closes this lesson by considering the pros and cons of a perfectly competitive industry.
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SHUTDOWN RULE A rule stating that a firm minimizes economic loss by producing no output in the short run if price is less than average variable cost. This is one of three short-run production alternatives facing a firm. The other two are profit maximization (if price exceeds average total cost) and loss minimization (if price is less than average total cost but greater than average variable cost).
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time calling an endless list of 800 numbers hoping to buy either galvanized steel storage shelves or a large green chalkboard shaped like the state of Maine. Be on the lookout for strangers with large satchels of used undergarments.
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This isn't me! What am I?
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Rosemary, long associated with remembrance, was worn as wreaths by students in ancient Greece during exams.
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"Well done is better than well said. " -- Benjamin Franklin, statesman, inventor
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EPS
Earnings Per Share
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