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Contract Curve
In microeconomics, the contract curve or Pareto set is the set of points representing final allocations of two goods between two people that could occur as a result of mutually beneficial trading between those people given their initial allocations of the goods. All the points on this locus are Pareto efficient allocations, meaning that from any one of these points there is no reallocation that could make one of the people more satisfied with his or her allocation without making the other person less satisfied. The contract curve is the subset of the Pareto efficient points that could be reached by trading from the people's initial holdings of the two goods. It is drawn in the Edgeworth box diagram shown here, in which each person's allocation is measured vertically for one good and horizontally for the other good from that person's origin (point of zero allocation of both goods); one person's origin is the lower left corner of the Edgeworth box, and the other person's origin is ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Microeconomics
Microeconomics is a branch of economics that studies the behavior of individuals and Theory of the firm, firms in making decisions regarding the allocation of scarcity, scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics. One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce Economic efficiency, efficient results. While microeconomics focuses on firms and individuals, macroeconomics focuses on the total of economic activity, dealing with the issues of Economic growth, growth, inflation, and unemployment—and with national policies relati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Pareto Efficient
In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves at least one person in society better off without leaving anyone else worse off than they were before. A situation is called Pareto efficient or Pareto optimal if all possible Pareto improvements have already been made; in other words, there are no longer any ways left to make one person better off without making some other person worse-off. In social choice theory, the same concept is sometimes called the unanimity principle, which says that if ''everyone'' in a society ( non-strictly) prefers A to B, society as a whole also non-strictly prefers A to B. The Pareto front consists of all Pareto-efficient situations. In addition to the context of efficiency in ''allocation'', the concept of Pareto efficiency also arises in the context of ''efficiency in production'' vs. '' x-inefficiency'': a set of outputs of go ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Edgeworth Box
In economics, an Edgeworth box, sometimes referred to as an Edgeworth-Bowley box, is a graphical representation of a market with just two commodities, ''X'' and ''Y'', and two consumers. The dimensions of the box are the total quantities Ω''x'' and Ω''y'' of the two goods. Let the consumers be Octavio and Abby. The top right-hand corner of the box represents the allocation in which Octavio holds all the goods, while the bottom left corresponds to complete ownership by Abby. Points within the box represent ways of allocating the goods between the two consumers. Market behaviour will be determined by the consumers' indifference curve, indifference curves. The blue curves in the diagram represent indifference curves for Octavio, and are shown as convex from his viewpoint (i.e. seen from the bottom left). The orange curves apply to Abby, and are convex as seen from the top right. Moving up and to the right increases Octavio's allocation and puts him onto a more desirable indifference ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Walrasian Equilibrium
Competitive equilibrium (also called: Walrasian equilibrium) is a concept of economic equilibrium, introduced by Kenneth Arrow and Gérard Debreu in 1951, appropriate for the analysis of commodity markets with flexible prices and many traders, and serving as the benchmark of efficiency in economic analysis. It relies crucially on the assumption of a perfect competition, competitive environment where each trader decides upon a quantity that is so small compared to the total quantity traded in the market that their individual transactions have no influence on the prices. Competitive markets are an ideal standard by which other market structures are evaluated. Definitions A competitive equilibrium (CE) consists of two elements: * A price function P. It takes as argument a vector representing a bundle of commodities, and returns a positive real number that represents its price. Usually the price function is linear - it is represented as a vector of prices, a price for each commodity t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Pareto Efficiency
In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves at least one person in society better off without leaving anyone else worse off than they were before. A situation is called Pareto efficient or Pareto optimal if all possible Pareto improvements have already been made; in other words, there are no longer any ways left to make one person better off without making some other person worse-off. In social choice theory, the same concept is sometimes called the unanimity principle, which says that if ''everyone'' in a society (strict inequality, non-strictly) prefers A to B, society as a whole also non-strictly prefers A to B. The Pareto frontier, Pareto front consists of all Pareto-efficient situations. In addition to the context of efficiency in ''allocation'', the concept of Pareto efficiency also arises in the context of productive efficiency, ''efficiency in prod ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Marginal Rate Of Substitution
In economics, the marginal rate of substitution (MRS) is the rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility. At equilibrium consumption levels (assuming no externalities), marginal rates of substitution are identical. The marginal rate of substitution is one of the three factors from marginal productivity, the others being marginal rates of transformation and marginal productivity of a factor. As the slope of indifference curve Under the standard assumption of neoclassical economics that goods and services are continuously divisible, the marginal rates of substitution will be the same regardless of the direction of exchange, and will correspond to the slope of an indifference curve (more precisely, to the slope multiplied by −1) passing through the consumption bundle in question, at that point: mathematically, it is the implicit derivative. MRS of X for Y is the amount of Y which a consumer c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Indifference Curves
In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is ''indifferent''. That is, any combinations of two products indicated by the curve will provide the consumer with equal levels of utility, and the consumer has no preference for one combination or bundle of goods over a different combination on the same curve. One can also refer to each point on the indifference curve as rendering the same level of utility (satisfaction) for the consumer. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer. Utility is then a device to represent preferences rather than something from which preferences come. The main use of indifference curves is in the representation of potentially observable demand patterns for individual consumers over commodity bundles. Indifference curve analysis is a purely technolog ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Welfare Economics
Welfare economics is a field of economics that applies microeconomic techniques to evaluate the overall well-being (welfare) of a society. The principles of welfare economics are often used to inform public economics, which focuses on the ways in which government intervention can improve social welfare. Additionally, welfare economics serves as the theoretical foundation for several instruments of public economics, such as cost–benefit analysis. The intersection of welfare economics and behavioral economics has given rise to the subfield of behavioral welfare economics. Two fundamental theorems are associated with welfare economics. The first states that competitive markets, under certain assumptions, lead to Pareto efficient outcomes. This idea is sometimes referred to as Adam Smith's invisible hand. The second theorem states that with further restrictions, any Pareto efficient outcome can be achieved through a competitive market equilibrium, provided that a social ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
List Of Economics Topics
The following outline is provided as an overview of and topical guide to economics. Economics is a branch of science that analyzes the production, distribution, and consumption of goods and services. It aims to explain how economies work and how agents (people) respond to incentives. Economics is a behavioral science (a scientific discipline that focuses on the study of human behavior) as well as a social science (a scientific discipline that explores aspects of human society). Branches of economics * Macroeconomics – branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. * Microeconomics – branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources. Subdisciplines of economics * Agricultural economics – applied field of economics concerned with the application of economic theory in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Andreu Mas-Colell
Andreu Mas-Colell (; born 29 June 1944) is an economist, an expert in microeconomics and a prominent mathematical economist. He is the founder of the Barcelona School of Economics and a professor in the department of economics at Pompeu Fabra University in Barcelona, Catalonia, Spain. He has also served several times in the cabinet of the Catalan government.Curriculum vitae from Mas-Colell's web site at Pompeu Fabra, retrieved 2025-05-30.Faculty profile Barcelona School of Economics, retrieved 2025-05-30.. [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
