Karen's Food OK Contract James's Curve、 Karen's Clothing Clothing 01 James's Food The Contract Curve
The Contract Curve
Contract curve-Curve showing all efficient allocations of goods between two consumers,or of two inputs between two production functions. The contract curve contains all allocations for which consumers'indifference curves are tangent. Every point on the curve is efficient because one person cannot be made better off without making the other person worse off
Contract curve-Curve showing all efficient allocations of goods between two consumers, or of two inputs between two production functions. The contract curve contains all allocations for which consumers’ indifference curves are tangent. Every point on the curve is efficient because one person cannot be made better off without making the other person worse off
Karen's Food 10F OK 6C Price Line James's Karen's Clothing Clothing u 6C 0, James's Food 10F Competitive Equilibrium
Competitive Equilibrium
In a competitive market the prices of the two goods determine the terms of exchange among consumers. If A is the initial allocation of goods and the price line PP' represents the ratio of prices,the competitive market will lead to an equilibrium at C,the point of tangency of both indifference curves. As a result,the competitive equilibrium is efficient
In a competitive market the prices of the two goods determine the terms of exchange among consumers. If A is the initial allocation of goods and the price line PP' represents the ratio of prices, the competitive market will lead to an equilibrium at C, the point of tangency of both indifference curves. As a result, the competitive equilibrium is efficient
Excess demand-When the quantity demanded of a good exceeds quantity supplied. Excess supply-When the quantity supplied of a good exceeds quantity demanded. Welfare economics-Normative evaluation of markets and economic policy
Excess demand - When the quantity demanded of a good exceeds quantity supplied. Excess supply - When the quantity supplied of a good exceeds quantity demanded. Welfare economics - Normative evaluation of markets and economic policy