Discussion Questions for Wed. 10/18 on Sections 5.2, 9.1, 9.2 and Kaldor
1. What is a Pareto improvement? When is one state of affairs a Pareto improvement over another?
2. What is Pareto optimality or Pareto efficiency?
3. Suppose that R is Pareto optimal and that S is not. Does it follow that R is Pareto superior to S?
4. Should one believe that, other things being equal, a Pareto improvement is a moral improvement? Why? What are the "other things" that may or may not be "equal"?
5. What are the implications of denying the possibility of interpersonal comparisons? Kaldor argues that the case for free trade in corn [grains] does not in fact depend on being able to make interpersonal comparisons of welfare. Why not?
6. What is the Pareto principle? What is the principle of the personal good? How are they related?
7. Explain figure 9.2.1 on page 141 in your own words. What does the graph show? Does it establish that cash benefits are better than in-kind benefits?
8. Kaldor argues that there are some things upon which economists qua economists can have opinions and some things concerning which they have no special expertise. How are these two classes of things distinguished?