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Micro economic EFFICIENCY AND EQUITY参考
* Notes and teaching tips: 8, 25, 46, and 62. To view a full-screen figure during a class, click the red “expand” button. To return to the previous slide, click the red “shrink” button. To advance to the next slide, click anywhere on the full screen figure. * * * * * Explain that because landlords can’t be forced to supply a greater quantity than they wish, the quantity of housing supplied at the rent ceiling is less than the quantity that would be supplied in an unregulated market. * * * * * * * * * * * * * * * * * Talk about the study of wage and employment data by David Card and Alan Krueger (Myth and Measurement: The New Economics of the Minimum Wage Law, Princeton: Princeton University Press, 1995), which suggests that minimum wage laws do not cause unemployment. Note that other economists disagree and claim that ceteris paribus conditions were violated regarding: the timing of hiring decisions regional differences * * * * * * * * * * * Although done just with words and a diagram, this section explains the astonishing so-called “first fundamental theorem of welfare economics” that under appropriate conditions, competitive equilibrium is Pareto efficient (what this textbook calls an efficient allocation). You might want to provide your students with more background to this astonishing result. It begins with Adam Smith’s invisible hand conjecture. Some progress was made by Vilfredo Pareto (1848–1923), an Italian economist (see /het/profiles/pareto.htm), who defined an efficient allocation as one in which it is not possible to rearrange the use of resources an make someone better off without making someone else worse off. But Adam Smith’s conjecture did not receive formal proof until the 1950s. John Hick, Kenneth Arrow, and Gerard Debreu are credited with the major contributions to welfare economics and received the Nobel Prize in Economic Sciences for their work (see http://www.nobel.se/economics/laureates/1972/index.html, http://www.nobel.se/economics/laurea
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