Definition of The First Welfare Theorem of Economics / The First Theorem of Welfare Economics: The first welfare theorem is the statement that a Walrasian equilibrium is weakly Pareto optimal. Such a theorem is true in a large and important class of general equilibrium models (usually static ones). The standard case is if every agent has a positive quantity of every good, and every agent has a utility function that is convex, continuous, and strictly increasing, the then the First Welfare Theorem holds. (Econterms)

Terms related to The First Welfare Theorem of Economics / The First Theorem of Welfare Economics:

• Walrasian equilibrium
• Weakly Pareto optimal
• Static