Posts Tagged ‘econ’

Micro: Pareto Inefficiency

In microeconomics, a Pareto inefficiency is when an economy is not operating on the edge of its PPF and is, therefore, not fully exploiting its scarce resources.

This concept was popularized by the seminal economist Vilfredo Pareto.

This means that the economy is producing less than the maximum possible output of goods and services, from its resources.

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Micro: Distributive Inefficiency

 In welfare economics, distributive inefficiency is the situation wherein goods and services are not received by those who have the greatest need for them.
Abba Lerner proposed the idea of distributive efficiency in his 1944 book The Economics of Control.
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