Lecture C3 (2020-09-24): Benefits and Costs Across Individuals

In this lecture, we go into detail about the graphical solution to maximizing the intertemporal social welfare function (i.e., balancing present and future benefits and costs consistent with temporal discounting). We then pivot to considering social welfare functions that balance across individuals instead of across times. We use these social welfare functions to motivate why another framework is needed to be more practical, which will allow us to discuss Pareto optimality in the next lecture.