Pareto efficiency

What is Pareto efficiency? Why do economists use this criterion for comparing alternative economic systems?

Property rights

What is a property right? What role do property rights play in a market economy?

Economic Systems

Twin brother, Tom and Bill, constantly fight over toys. For instance, Tom will argue it is his turn to play with a toy, while Bill argues it is his turn. Their parents frequently have to intervene in these disputes. Their mom has conceived an idea that might reduce these conflicts. In particular, every toy in the house would be "owned" by one of the boys. The owner would have complete authority over the use of the toy. The mom reasons that ownership would cut down on disputes. Any time there is an argument over a toy, the owner gets the final and immediate say. The boys' dad is concerned that this idea will prevent the boys from learning to "share." He envisions that under the new s... click for more

Results of price and quantity in various situations

What do you think will happen to the price and quantity of DVD players if a. The availability of good movies to play on DVD players increases? b. Personal income increases? c. The price of inputs used to produce DVD players decreases? d. Ticket prices at local movie theaters decline substantially?

Externality

a. What is an externality? b. Why might externalities lead a firm to discharge too much pollution into a river? c. Congress has passed a law that limits the level of cotton dust within textile factories. Why might a textile firm allow too much cotton dust within its workplace?