This course aims at: 1. providing the student with a general understanding of resource allocation and its relationship to producer and exchange efficiency. 2. Connecting the theory of welfare economics to practical economic issues, adopting a critical approach towards the orthodox paradigm.
Bachelor’s degree, intermediate micro-economics.
The student will be able to use the concepts of Pareto criterion in application to economic policy decision making, applying the concepts in micro-economics of consumer and producer theory to the theory of optimal resource allocation. Hopefully, the student will be able to undertake a critical examination of resource allocation efficiency and equity. Finally, the student will be encouraged to review real-world cases and assess them from both the neoclassical and alternative approaches to resource management.
PART I: Welfare through production and distribution 1. Pareto Optimality 2. Exchange/Production 3. Producer/consumer surplus 4. Allocative, Technical and Scale Efficiency PART II: Applying intermediate microeconomic theory to resource management 1. Externalities 2. Property rights and Coase theorem 3. Pigouvian taxes 4. Coase Theorem 5. Tragedy of the commons References Coelli, T.J., Rao, D.S.P., and C.J., Battese, G.E. (1998). An Introduction to Efficiency and Productivity Analysis, Kluwer. Just, R.E., D.L. Hueth and A. Schmitz (1982). Applied Welfare Economics and Public Policy, Prentice Hall.
The primary modes of delivery are readings, lecture, and discussion. The primary resource material for each lecture is prepared on power point slides and distributed to the students prior to the lecture. During each lecture period, the theory is introduced and explored in detail. Throughout the lecture examples are presented and discussion is interspersed with the goal of connecting theory to practice. As the week progresses, more practical aspects of the theory are explored to find avenues for connecting the theory with the practice.
There is a graded max. 3-page essay to be submitted following in-class discussion and participation, as well as review and understanding of the additional reading. There is no final examination. Essay: 100%. The essay must combine the following features and will be evaluated according to each essay´s degree of achievement of each one of them: 1 Well-written, 2 Interesting-innovative, 3 Use of as many of the concepts of the standard ("neoclassical") material discussed in class as possible.