ABSTRACT
Our main concern in the previous chapters has been with the behaviour of individual economic agents under various conditions, and with some of the implications of that behaviour for the allocation of resources in an economy. The primary emphasis has been on the positive aspects of that behaviour in that the concern has been with analysing the choices the agents actually make. In places we have, however, introduced some more normative elements into the discussion, particularly in the comparison of perfect competition and monopoly where we raised the question of whether the allocation of resources was ‘better’ from the point of view of the broader community in one case than the other. This kind of question is of general interest because of its implications for economic policy, and indeed a primary motivating force in the development of economics as an academic discipline has always been the desire to provide a more satisfactory analytical framework for the consideration of policy issues. However, discussion of these matters requires more careful consideration than we have attempted so far of the criteria by which one situation might be considered better or worse than another. This is a particular concern of what is usually referred to as welfare economics and that is the focus of interest in the remaining chapters of the book.
