Explain the difference between partial equilibrium analysis and general equilibrium analysis
What will be an ideal response?
A partial equilibrium analysis looks at adjustments in only one isolated market. A general equilibrium analysis considers the adjustments that take place in all markets.
You might also like to view...
The monetary policy strategy that provides an automatic rule for the conduct of monetary policy is
A) exchange-rate targeting. B) monetary targeting. C) inflation targeting. D) the implicit nominal anchor.
In 1985 a desert community stopped pumping water from a 1000 foot well because it had run dry. In 2005 the price of water doubled. The community then drilled the well deeper and started pumping again. In this community,
A. water production is characterized by increasing opportunity costs. B. markets cannot reach equilibrium because there is a persistent shortage of water. C. the supply of water is perfectly inelastic because it is a finite resource. D. higher water prices can reduce quantity demanded but cannot increase quantity supplied.
Learning by doing suggests that:
A. patents are more valuable. B. diminishing marginal productivity occurs more rapidly. C. greater experience increases efficiency. D. greater experience increases production costs.
Refer to the information provided in Table 3.1 below to answer the question(s) that follow. Table 3.1Price per PizzaQuantity Demanded (Pizzas per Month)Quantity Supplied (Pizzas per Month)$31,200 600 61,000 700 9 800 80012 600 90015 4001,000Refer to Table 3.1. If the price per pizza is $12, the price will
A. increase because there is an excess demand in the market. B. decrease because there is an excess supply in the market. C. decrease because there is an excess demand in the market. D. remain constant because the market is in equilibrium.