The correct answer is D. The founder of Welfare economics was Alfred Marshall.
Welfare economics is the branch of economics that studies the optimal allocation of scarce resources among competing uses. It is based on the premise that the goal of economic policy is to maximize social welfare, which is defined as the sum of individual utilities.
Welfare economics is a normative science, which means that it makes value judgments about what is good and bad. It is not a positive science, which means that it does not make predictions about what will happen.
Welfare economics focuses on questions about equity as well as efficiency. Equity refers to the fairness of the distribution of income and wealth. Efficiency refers to the use of resources in a way that maximizes output.
Alfred Marshall was a British economist who is considered to be one of the founders of neoclassical economics. He is best known for his book Principles of Economics, which was first published in 1890. Marshall’s work had a profound influence on the development of economic thought.
However, Marshall did not make any significant contributions to welfare economics. The first person to use the term “welfare economics” was Francis Edgeworth in his book Mathematical Psychics, which was published in 1881. Edgeworth was a British economist who is considered to be one of the founders of mathematical economics. He is best known for his work on utility theory and welfare economics.
The following are some of the key concepts in welfare economics:
- Pareto efficiency: A Pareto efficient allocation of resources is one in which it is impossible to make someone better off without making someone else worse off.
- Social welfare function: A social welfare function is a mathematical function that maps from the distribution of income and wealth to a single number that represents the level of social welfare.
- Kaldor-Hicks efficiency: A Kaldor-Hicks efficient allocation of resources is one in which the winners from a change in policy could compensate the losers and still be better off.
- Arrow’s impossibility theorem: Arrow’s impossibility theorem states that it is impossible to construct a social welfare function that satisfies a set of reasonable conditions.
Welfare economics is a complex and controversial field of economics. It is a field that is constantly evolving as new ideas and theories are developed.