Tag Archives | Public Finance

Public and Private Finance: Similarities and Difference

In this article we will discuss about the similarities and difference between public and private finance. Similarities between Public and Private Finance: While the individual is concerned with the utilization of labour and capital at his disposal, in order to satisfy some of his wants, the state is concerned with the utilization of the labour […]

Pareto Efficiency in Allocation of Goods (With Diagram)

Welfare economics is the study of efficiency and equity of resource allocation. Allocative efficiency is the point at which allocations maximize total net benefits of society. Pareto efficiency or optimality is another way to measure efficiency. Developed by Vilfredo Pareto, (1848 – 1923) Pareto efficient allocation of goods occur when no other possible allocation makes […]

Negative Externality and Economic Inefficiency

In this article we will discuss about how negative externality becomes a source of economic inefficiency. Suppose John an ambitious rock musician, resort to the practice of playing electronic guitar, every day for five hours in his house. However John’s immediate neighbor, Peter does not enjoy listing to the ear-storming guitar notes. The practice time […]

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