Welfare economics Need systematic framework to assess the desirability of various government actions Welfare economics is concerned with the social desirability of alternative economic states Distinguishes cases when private markets work well from cases where government intervention may be warranted Relies heavily on basic microeconomic tools, particularly indifference curves2 Welfare economics • Need systematic framework to assess the desirability of various government actions. • Welfare economics is concerned with the social desirability of alternative economic states. – Distinguishes cases when private markets work well from cases where government intervention may be warranted. • Relies heavily on basic microeconomic tools, particularly indifference curves