Efficiency in simple general equilibrium models of competitive markets and market failures in which the first and second welfare theorems do not hold. Externalities, public goods, and monopoly pricing. The relative merits of the Kaldor-Hicks compensation principle in partial equilibrium analysis and the Pareto principle in general equilibrium analysis.
Prerequisites: ECON 121 or 125, and MATH 112 or equivalent.
[Also EP&E 237a]