How Public Sector Economists Can Help- Positive Economics is descriptive or predictive (how various economic entities behave or are expected to behave under different situations)- Normative Economics prescriptive (introduces value judgments or specific objectives in weighing costs and benefits of alternative policies)

MARKET EFFICIENCY

Economic Efficiency- Pareto efficiency (in exchange, in production)- not necessarily the optimal, but it is when there is no trade off in allocating resourcesWelfare economics- is a branch of economics that is concerned with the social desirability of alternative economic states- attempts to maximize the level of social welfare - refers to overall utilitarian state (or level of satisfaction) of society - defined as the summation of the welfare of all individuals in the society- uses microeconomic techniques to simultaneously determine:- allocational efficiency of an entire economy- income/welfare distribution (equity) consequences associated with it- distinguishes cases where private markets work well from cases where government intervention may be warranted