14.04 | Fall 2020 | Undergraduate

Intermediate Microeconomic Theory

Lecture 16: Fundamental Welfare Theorems

An equilibrium with competitive markets implies a particular distribution of income, which some may not like. Nevertheless, there is a way to get to any Pareto efficient allocation if in addition to markets we allow lump sum transfers of wealth. Markets per se are not the problem.

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Fall 2020
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