罗森财政学课件chap03.pptVIP

Chapter 3 – Tools of Normative Analysis Public Finance Welfare Economics Need systematic framework to assess the desirability of various government actions. Welfare economics is concerned with the social desirability of alternative economic states. Distinguishes cases when private markets work well from cases where government intervention may be warranted. Relies heavily on basic microeconomic tools, particularly indifference curves. Pure Exchange Economy Economy with 2 people (Adam Eve) 2 commodities (Apples Figs) Fixed supply of commodities (e.g., on a desert island) An Edgeworth Box depi