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Pareto optimality is a neccessary nut not a sufficient condition for welfare maximaisation. Examine this statement in the context of a given social welfare function and grand utility possibility frontier.

2006-12-31 08:14:21 · 2 answers · asked by tin m 1 in Social Science Economics

2 answers

Pareto optimality simply means that you cannot increase the utility of some members of the population without decreasing the utility of other members of the population. If you have resources that are fully distributed, and that add utility indefinitely, you have reached a point of Pareto optimization, no matter how you have distributed them.
This could mean that one person has all of the resources, and no one else has any. By redistributing the resources, you would make the population better off, but would make the one individual less well off. As long as all resources are distributed, you have reached a point of Pareto optimality.
To reach a point of maximum utility, you would have to distribute resources so that each unit adds the greatest amount of utility to the population as a whole. Once all resources are utilized in this manner, you would have reached both a point of Pareto optimality and maximum utility, assuming that the resources are indefinitely additive to utility (i.e. too much water could theoretically reduce utility, if you drowned in it).
The main assumption in this analysis is decreasing utility of resources. If resources are equally valuable to each individual, no matter how much they have, then the distribution of resources does not matter to total utility.

2006-12-31 09:22:34 · answer #1 · answered by William N 5 · 1 0

you're asking why those with non secular variations don't get alongside. My pal, they in no way have and that they in no way will. what number wars have been fought over this comparable subject? As Christians, we would desire to continually understand to love our fellow guy regardless of their ideals. you could no longer whip somebody into believing. If somebody is waiting, they're going to seem for the guidance devoid of us being overly assertive. we would desire to continually open the door and in the event that they opt to bypass thrugh it, it quite is going to be their determination. contained meanwhile, comprehend that others will have self assurance what they choose no remember how we experience approximately it. in the event that they opt to attack us, it quite is purely words for now. purely don't be the only doing the attacking. we are Christians and we don't do this. in spite of the fact that i'm continually up for a sturdy debate.

2016-12-15 05:38:31 · answer #2 · answered by ? 4 · 0 0

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