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【正文】 t allocation of resources by making a suitable assignment of initial endowments (redistributing ine) and then letting the markets work. 329 Market Failure ? Market Power – Monopoly ? Nonexistence of Markets – Asymmetric information – Externality – Public good 330 Buying into Welfare Economics ? Individualistic outlook – Merit goods ? Results orientation ? Coherent framework for analyzing policy – Will it have desirable distributional consequences? – Will it enhance efficiency? – Can it be done at a reasonable cost? 。CHAPTER 3 Tools of Normative Analysis Copyright 169。 2020 by the McGrawHill Companies, Inc. All rights reserved. McGrawHill/Irwin 32 Welfare Economics ? Welfare Economics – branch of economic theory concerned with the social desirability of alternative economic states 33 Edgeworth Box Adam Eve 0 0’ s r Apples per year Fig leaves per year v w u y x 34 Indif
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