Principles of Microeconomics / Unit 7 MIC 0637 short lesson, about 20 seconds
What Efficiency Does Not Mean
Captions available
The idea
Efficiency is a specific term, not a synonym for desirable. Willingness to pay reflects the income distribution, so an efficient allocation can still be one a society finds unfair.
In practice
A market can efficiently serve the rich and leave the poor unserved.
Where people slip
The model assumes away pollution, poverty, public goods and bad information. The later units are where those assumptions come off.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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