The First Fundamental Theorem Of Welfare Economics

Introduction When studying market structure, the First Fundamental Theorem of Welfare Economics states that markets will distribute resources efficiently if the following conditions are met: the market is perfectly competitive, there are no externalities or public goods, markets are complete, and there is no asymmetric information (Gruber, 2013). If a healthcare market complied with these four pillars of the First Welfare Theorem, a healthcare provider’s choice of output would not affect the price of the service, ultimately leading to Pareto efficiency. As seen in Figure 1, the consumer demand curve would be horizontal, as average revenue, marginal revenue, and price would be the same, constant value. Figure 1: Perfect Competition†¦show more content†¦If the provider produces one extra unit of a good or service, the overall price decreases. The provider receives a lower price for infra-marginal goods, or the goods that would have been sold without reducing the price (Png, 2012). For example, if a healthcare provider chooses to increase production from 100 units to 200 units, the price must be reduced from $50 to $40. The provider will gain revenue (100 x $40= $4,000) from the additional units, but will lose ($50-$40) x 100= $1,000) the 100 infra marginal units that the provider could have sold at the higher price. So, average revenue for the provider will be $40, while marginal revenue will be $30. Thus, average revenue and price remain equal, while marginal revenue now falls below the price curve (Png, 2012). Figure 2: Marginal Revenue Curve vs. Average Revenue Curve in a Monopoly In order to determine price, the monopolist utilizes the inverse demand curve, also known as the average revenue curve. This curve reflects the price the provider would need to charge to produce demand at a particular level. Thus, the average revenue curve dictates what price the next unit can be sold at, while the marginal revenue curve reflects how much additional revenue is received for selling the next unit (Schwartz, 2010). As can be seen in Figure 3, since marginal revenue does not equal average revenue, the monopolist will set the quantity supplied where marginal revenue is equal to marginal cost. However, it willShow MoreRelatedArrow Impossibility Theorem1059 Words   |  5 Pagesâ€Å"The Arrow impossibility theorem and its implications for voting and elections† Arrow’s impossibility theorem represents a fascinating problem in the philosophy of economics, widely discussed for insinuating doubt on commonly accepted beliefs towards collective decision making procedures. 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The Far-Reaching Effects of The Industrial Revolution Essay

During the period from the early 18th century to the mid 19th century people experienced many changes that had an impact on their lives such as technical advance, development of transport, trade, better organization of output or new financial structures. All these achievements happened spontaneously and were not planned. Economy was in process of rapid change and it gave many opportunities for people to gain wealth as well as social advancement. Almost every aspect of people’s lives was influenced in some way. This essay would like to argue that there were many innovations during this era; however, the biggest changes that people went through were industrialization and trade. Industrialization stalled the manual labour and set off the†¦show more content†¦Workers had to obtain new skills, attitudes and work discipline. No wonder that many workers disagreed and resisted either actively or passively. Those who were willing to adapt new system were forced to leave their domestic workshop because they would have had a little chance to compete against new factories. It was a change for entrepreneurs as well. They worked out the problems related to management, financing or accounting. If managers wanted to be successful they had to change the organization of work and control their employees. Before, work morale or fixed working hours were not common. Workers used to drink 3 days a week.Work was often inefficient, protracted and changes were necessary. Thanks to English pottery master Josiah Wedgewood, the most important innovations occurred during this era in the labour market. It was subdivision of tasks, training of new workers and work discipline. Let’s look at subdivision of work first. One worker no longer made the whole product by himself. Work was simplified to a single process and became a dull routine. Same mechanical process was incessantly repeated over and over again. 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Me, Myself A Rolling Stone Out to Gather Mosses! Free Essays

Old proverbs made new, so is the scripting of my life so far. Thus at the outset I thank the Almighty for presenting me a unique kaleidoscope to look through and to bask in the joy of discovering the unknown! The Journey I breathed first at Taiwan, then turned into teens at Shanghai and now I’m busy shaping my life in US. My horizon zoomed on gradually, and surely, it couldn’t have been better! I hope someday I could boast about myself as a happy citizen of a global village. We will write a custom essay sample on Me, Myself: A Rolling Stone Out to Gather Mosses! or any similar topic only for you Order Now Thankfully, it was not the case of uprooting, and instead it all went like a series of happy adventure so far. Of course, a few hiccups were there, but who cares if it took some sweat to rise from a non-starter to a first boy in English Class at 7th grade (Shanghai), or for that matter, to adapt to the ethnic cuisine there? Who cared either, when it took some extra effort to excel in the Basketball Varsity Team in spite of a shorter height! Challenges actually serve as springs beneath the launching pads – so I have learnt from my experience – the greater the challenge, the greater the scope to attain a new height! I liked them all. With this spirit, this humble fish has now reached the sea, thankfully with time and tide by its side as guardian angels – one to provide the power of young mind, and the other, which is YOU, to provide me the scope to utilize that power, let alone guiding and governing me towards the right direction. As for the rough shades, I am lucky to have seen off the monotony of a run-of-the-mill life or political storms at places. I still detest the identical uniforms and rigid routines at Taiwan School, or political tension between Taiwan and Shanghai. These are the humdrums I’ve left behind. Yet I will obviously carry with me the simplicities of Taiwan and the financial/economic knowledge that I could garner from Shanghai. I would always salute my teachers at Villanova (the premier school of Shanghai) for cementing my basement of knowledge and rousing my craving for more of it. And why not? This business school has equipped me bit by bit, to meet all the challenges of academic and social circumstances whatsoever anywhere! And my parents! Words would fall short to describe their contribution in my life. It’s because of them I could develop the attitude to find rhythm in diversity, to walk through the tough terrains of the unknown and to appreciate anything good anywhere.   It’s this attitude that has made my transitions smoother and enjoyable – why, today I love English language no less than Taiwanese, or for that matter Chinese. Thanks to the unique and varied grooming, today I comprehend one adage from my heart:   â€Å"The more you learn, the more it opens up for learning.† Coming of Age I love my pond, I love that bigger lake too and now I’m excited about my prospect in the sea! So what if I think to raise more capillaries in my brain through varied social, academic and spiritual sparks? The bigger the canvas the bigger scope for its painter! I dream to be a part of the US society, an active molecule to its social, academic and cultural chemistry. I dream to be a big fish in Economics. Big fishes need sea, and so I am here! And yes! It would never be all about taking. Thanks to the new age gurus, I’m a firm believer of the Law of Giving. Thus it has to be a unique symbiosis between my world and me. And this is the world for me. Study and masterminding scopes cannot be better than what is available here. The fuss about politics is absent; the freedom of expression is highly regarded. These are the ideal conditions for a student to grow. Here I will be able to continue my co curricular activities too – I can brush up my Basketball skills again, or the debating skills I earned from the Student Association body. I can renew my writing or editing skills. I can unwind with community services. I can bask in the warmth of friendship. Here’s the scope. Here I will be able to light a thousand bulbs in the hall of my heart. It’s here I’ll be able to air, care and share all of me. This place is the ideal example to establish the law of giving. This is my choicest springboard for actions. And who doesn’t know, actions speak louder than words? That is my mantra and with that I’m merrily waiting at your gate. Knock knock knock! Open the door and let me in! I’ve wonderful dreams waiting to be unearthed. Let that happen here! Ends How to cite Me, Myself: A Rolling Stone Out to Gather Mosses!, Essay examples

Sconomics Questions Essay Example For Students

Sconomics Questions Essay By: Raymond LiEconomics Questions1.Define the problem of scarcity outlined in this article. The problem of scarcity outlined in this article is that Canadas farmland has been decrease rapidly. Most of the farmlands were turned to buildings. In the 21st century, all the countries in the world want to develop their country to be the top line of the world, so they begin to construct farmlands into new cities, but the main point is they had forget that we also need land to plant our food to supply ourselves. 2.What are the opportunity costs of losing the countrys prime agricultural land to development?The opportunity costs of losing the countrys prime agricultural land to development is that we will eventually lose the ability to supply our own food. By the time we lose the ability to supply our own food, we have to import food from other countries to survive and Canada we down grade to a third world country. 3.What are the opportunity costs of banning development in the agricultural lands?The opportunity costs of banning development in the agricultural lands are some parts of the lands are not going to be developed. By the time we develop the agricultural lands, we are also slowing down the developments on other important categories that might cause a serious problem by letting other countries to overcome us. 4.Explain the proposals put forward to ease or alleviate the problems. The proposals that were put forward to ease the problems are preservation laws, land reserves, conservation easements, etc. 5.Do you consider the proposals forwarded in the article to be workable? Give reasons for your answer. The proposals forwarded in the article might slow down the destruction of farmland, but that wont stop the destruction. Although, government and conservation groups had work on buying farmlands off farmers, but the price that they can spend on are way off to the one, which the developers offer. 6.What opportunity costs might the forwarded proposals involve?The opportunity costs that might forwarded proposals involve is that our government are going to spend a large amount of money to get those farmlands from the farmers and they have to spend more money to hire more workers to work on the farm.