With respect to the supply and demand for a given product, describe the connection that exists between equilibrium/disequilibrium and predictions. Cite your own unique example in order to help support your answer
Economists use the concepts of equilibrium and disequilibrium to help make predictions of what is about to happen. When a market is in disequilibrium, such as when the quantity demanded of good X exceeds the quantity supplied of good X, the economist knows that this will lead to a change in the market price. The economist is aware that this is a temporary state, and that the price of good X will rise since there is a shortage of the product (Qd > Qs). This market that was in disequilibrium will soon move to equilibrium. The economist is making a prediction of what will happen to the quantity demanded and quantity supplied of good X, as well as its price.
You might also like to view...
The Internet has created a new category in the book selling market, namely, the "barely used" book. How does the availability of barely used books affect the market for new books?
A) The demand curve for new books shifts to the right. B) The supply curve for new books shifts to the left. C) The demand curve for new books shifts to the left. D) The supply curve for new books shifts to the right.
A direct implication of the special interest theory of government is that _____
a. political pressure from special interests pushes government to expand b. special interests get whatever they want c. special interests do not get what they want under Incrementalism d. the general public general can apply more pressure than special interests and thus will move the budget in drastic ways, depending upon public sentiment
When a check is cleared against Bank A after being deposited at Bank B, _____
a. both Bank A's and Bank B's liabilities increase b. both Bank A's and Bank B's liabilities decrease c. Bank A's liabilities increase and Bank B's liabilities decrease d. Bank A's liabilities decrease and Bank B's liabilities increase e. there is an increase in the liabilities of the Federal Reserve
Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?
a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.