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Microeconomic reform is the implementation of policies that aim to reduce economic distortions via deregulation, and move toward economic efficiency. However, there is no clear theoretical basis for the belief that removing a market distortion will always increase economic efficiency.
The importance of Lindahl equilibrium is that it fulfills the Samuelson condition and is therefore Pareto efficient, [3] despite the good in question being a public one. It also demonstrates how efficiency can be reached in an economy with public goods by the use of personalized prices. The personalized prices equate the individual valuation ...
The term static efficiency belongs within neoclassical economics, which argues that explicit theoretical rationale of liberalisation is to achieve an efficient (static) allocation of resources. [1] In order to achieve this situation, there are three central assumptions within neoclassical economics that are indispensable for achieving an ...
Download as PDF; Printable version; In other projects Wikidata item; ... Pages in category "Economic efficiency" The following 14 pages are in this category, out of ...
Allocative efficient is only achieved when the economy produces at quantities that match societal preference. A PPF typically takes the form of the curve illustrated above. An economy that is operating on the PPF is said to be efficient, meaning that it would be impossible to produce more of one good without decreasing production of the other ...
In law and economics, the Coase theorem (/ ˈ k oʊ s /) describes the economic efficiency of an economic allocation or outcome in the presence of externalities.The theorem is significant because, if true, the conclusion is that it is possible for private individuals to make choices that can solve the problem of market externalities.
In labour economics, Shapiro–Stiglitz theory of efficiency wages (or Shapiro–Stiglitz efficiency wage model) [1] is an economic theory of wages and unemployment in labour market equilibrium. It provides a technical description of why wages are unlikely to fall and how involuntary unemployment appears.
For example, an economist might say that a policy change is an allocative improvement as long as those who benefit from the change (winners) gain more than the losers lose (see Kaldor–Hicks efficiency). An allocatively efficient economy produces an "optimal mix" of commodities.