ECON 1100 1nd Edition Lecture 23 Outline of Last Lecture I. ScaleII. Enter/Exit Marketa. Short-Run competitive equilibriumb. Long-Run competitive equilibriumOutline of Current Lecture I.Terminology & conceptsCurrent LectureI. Terminology & conceptsA lot of people participate in market for themselves; seen as:Worst case scenarioRealityProfit = producer surplus – fixed costWhen 1 industry does well, its complement industries will do well alsoMany markets are interlinkedAllocation of resources is a set of answers to what/how/for whomMarket system lets people choose from themselves to work with independent thinkingWant of being independent keeps market as economic base, rather than government taking control, if this happened, people wouldn’t be happyPareto efficiency (allocative efficiency) – a value judgmentDoes the change make things better?Change in allocation of resources is a Pareto-improvement if at least one person is betteroff and no one is worse off after the changeThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Win-win or win-tie: yes good or don’t careChange in allocation is a potential Pareto-improvement if gain to winners (in $ terms) is greater than losses to injured ($ terms) Win-lose but winners gain > losers lossPotential improvement & payment (from win to lose) = Pareto improvementImprovements or potential ones relate to
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