Chapter 1, Problem 9P

To determine

For each of following, explain whether you think the situation is efficient or not. If it is not efficient, why not? What actions would make it efficient?

1. Electricity is included in the rent at your dorm. Some residents in your dorm leave lights, computers, and appliances on when they are not in their rooms.

2. Although they cost the same amount to prepare, the cafeteria in your dorm consistently provides too many dishes that dinners don’t like, such as tofu casserole, and too few dishes that dinners do like such as roast turkey with dressing.

3. The enrollment for a particular course exceeds the spaces available. Some student who need to take this course to complete their major are unable to get a space even though others who are taking it as an elective do get a space.

Concept Introduction:

Pareto efficiency: This term is named after Italian economist Vilfredo Pareto. The Pareto efficiency says that a person cannot be better off without making someone worse off.