Learning Outcomes:
After completing this module students should be able to: 1. apply the the concepts of efficiency and equity as well as the two fundamental welfare theorems in a simple exchange economy. 2. explain the roles for the public sector that can be justified on efficiency grounds (correction of market failures due to externalities, public goods, imperfect competition, information asymmetry) 3. explain the roles of the state justified on equity grounds (welfare economics); describe the main poverty and inequality indices; describe the main results of optimal taxation 4. apply the theoretical concepts to analyse policies in the real world.