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In strategic planning, resource allocation is a plan for using available resources, for example human resources, especially in the near term, to achieve goals for the future. It is the process of allocating scarce resources among the various projects or business units. There are a number of approaches to solving resource allocation problems e.g ...
Allocation efficiency occurs when there is an optimal distribution of goods and services, considering consumer's preference. When the price equals marginal cost of production, the allocation efficiency is at the output level. This is because the optimal distribution is achieved when the marginal utility of good equals the marginal cost.
Fundamental theorems of welfare economics. There are two fundamental theorems of welfare economics. The first states that in economic equilibrium, a set of complete markets, with complete information, and in perfect competition, will be Pareto optimal (in the sense that no further exchange would make one person better off without making another ...
A narrower view of the theory of taxation reduces the system to two issues: who can pay and who can benefit (Benefit principle). Influential theories have been the ability theory presented by Arthur Cecil Pigou [2] and the benefit theory developed by Erik Lindahl. [3][4] There is a later version of the benefit theory known as the "voluntary ...
In order to fully understand market failure, one must first comprehend market success, which is defined as the ability of a set of idealized competitive markets to achieve an equilibrium allocation of resources that is Pareto-optimal in terms of resource allocation. According to the definition of market failure, it is a circumstance in which ...
Perfect competition. In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In theoretical models where conditions of perfect competition hold, it has been demonstrated that a ...
Kaldor–Hicks efficiency. A Kaldor–Hicks improvement, named for Nicholas Kaldor and John Hicks, is an economic re-allocation of resources among people that captures some of the intuitive appeal of a Pareto improvement, but has less stringent criteria and is hence applicable to more circumstances. A re-allocation is a Kaldor–Hicks ...
e. Optimal tax theory or the theory of optimal taxation is the study of designing and implementing a tax that maximises a social welfare function subject to economic constraints. [1] The social welfare function used is typically a function of individuals' utilities, most commonly some form of utilitarian function, so the tax system is chosen to ...