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PARETO IMPROVEMENT: Based on the Pareto efficiency criterion, the notion that an action improves efficiency if it is possible for one person to benefit without anyone else being harmed. A Pareto improvement is possible if the economy has idle resources or market failures. With idle resources, more production is possible to help some without hurting others. With market failures, corrective actions can eliminate deadweight loss that can then be use for benefits economy-wide. A contrasting condition for attaining efficiency is the Kaldor-Hicks improvement.
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Lesson 12: Elasticity and Demand | Unit 4: Determinants
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Page: 21 of 25
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In this unit, you should have learned about:- Substitute availability as the key elasticity determinant that affects the value of the coefficient of elasticity.
- Why goods with more close substitutes tend to be more elastic and goods with fewer closer substitutes tend to be inelastic.
- Why elasticity is greater for longer time periods because buyers have more time to find available substitutes.
- Why elasticity is greater for goods that constitute a larger proportion of buyers' budgets and smaller for goods that make up a smaller proportion of buyers' budgets.
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UTILITY MEASUREMENT A quantification of the satisfaction of wants and needs achieved through the consumption of goods and services. In principle, utility measurement can take one of two forms: (1) cardinal, which is based on numerical values (1, 2, 3, etc.) and (2) ordinal which is based on rankings (first, second, third, etc.). While the hypothetical instructional analysis of utility relies on cardinal utility, ordinal utility is a more realistic way to measure satisfaction.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages trying to buy either a coffee table shaped like the state of Florida or storage boxes for your summer clothes. Be on the lookout for deranged pelicans.
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This isn't me! What am I?
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The penny is the only coin minted by the U.S. government in which the "face" on the head looks to the right. All others face left.
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"The time to repair the roof is when the sun is shining." -- John F. Kennedy, 35th U. S. president
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CES
Constant Elasticity of Substitution
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