Economics Dictionary of ArgumentsHome
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| Efficiency: Economic efficiency is the optimal allocation of resources to produce the greatest possible output. It is a state where resources are used in a way that maximizes the satisfaction of human wants and needs._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Ronald Coase on Efficiency - Dictionary of Arguments
Kiesling I 49 Efficiency/Coase/Kiesling: In addition to reiterating that efficiency entails consideration of both marginal cost and total cost, Coase makes a transaction cost argument—that attempting a government survey to elicit consumer preferences is costly. Designing and implementing such a survey would be an expensive venture, and those transaction costs have to be considered when choosing a utility pricing scheme. Earlier work from Hotelling and others assumed that those transaction costs would be zero. >Marginal costs, >Transaction costs. Kiesling I 50 This point bolsters Coase’s epistemic argument that governments cannot aggregate the knowledge required to estimate fixed costs in the absence of a decentralized price system (an insight similar to Hayek’s (1945)(1) argument about the role of the price system). >Observability, >Government policy, >Marginal costs, >Marginal cost controversy/Coase. 1. Hayek, Friedrich August (1945). The Use of Knowledge in Society. American Economic Review 35, 4: 519-530. _____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Coase, Ronald Kiesling I L. Lynne Kiesling The Essential Ronald Coase Vancouver: Fraser Institute. 2021 |
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