General Equilibrium Teory - DeSerpa
What categorizes a competitive economy?
An economy is competitive if all agents (buyers and sellers) in all markets (final product markets and resource markets) act as price takers.
When does a competitive equilibrium occur?
A competitive equilibrium occurs when, for a given set of prices, the commodity bundles chosen by the consumer and the input-output choices of the producer satisfy:
1. Each consumer maximizes utility subject to his budget constraint.
2. Each firm maximizes profits over all feasible input-output combinations, determined by the nature of its production function.
3. The market clears (supply and demand are equal in each market)
4. Each firm earns only normal profits on its operations.
What is the production possibility curve?
The production possibility curve defines the limits of output combinations that are feasible, given technological and resource limitations.
What is the other name of the Production Possibility Curve?
Transformation Curve
What is the format of the Possibility Production Curve?
It is concave to the origin
What measures the Marginal Rate of transformation?
It measures the small changes in X and Y. It is an exact measure of relative marginal costs (MRT=MCx/MCy)
Beyond the Relative Marginal Cost ratio, what else does the MRT determine?
The MRT also determines a price ratio that must prevail if product markets are to be in equilibrium (MRT=MCx/MCy=Px/Py)
Can the MRTS and MRT determine absolute prices?
No, both ratios only determine relative factor prices (w/r) and relative output prices (Px/Py)
Is it possible to determine all prices in a general equilibrium model?
In a competitive equilibrium, all prices except one are determinate and must be consistent with the curvatures of isoquants and the transformation curve. Once one price is arbitrarily set, the remaining prices may be calculated.
What is a pure exchange economy?
An economy without production or money
What is a contract curve in an Edgeworth Box?
The contract curve links all the points of tangency between indifference curves. At these points, the marginal rates of substitution are equal (MRSa=MRSb)
What it is the budget constraints?
Each individual is constrained to choose a commodity bundle that costs no more than his initial endowment
When does the exchange equilibrium occur?
The exchange equilibrium occurs when the conditions of the budget constraints are satisfied, and also, each individual fulfills the assumption that more is preferred to less (monotonicity)
What is the Walras's Law?
For any economy with n commodities, equilibrium in n-1 markets implies that the remaining (nth) market must also be in equilibrium
How are the profits distributed in a competitive economy in equilibrium?
In a competitive equilibrium, economic profits do not exist, only normal profits
What does the Say's law describe?
Say's law describes the relationship between the total value of goods, profit, and factor income (π + wL + rK = PxX + PyY). This law suggests that economic activity must generate sufficient income to purchase all goods produced.
Competitive Equilibrium
State of an economic system in which all markets are purely competitive and in simultaneous equilibrium; all consumers maximize utility subject to their budget constraints, all producers maximize profits, all markets clear, and economic profits and quasi-rents are equal to zero
Contract Curve
Locus of points of tangency between indifference curves in an Edgeworth box diagram, characterized by equal marginal rates of substitution for each consumer
Endowment
A bundle of commodities and/or resources owned by individuals in some initial situation before production and exchange decisions have been made
Exchange Equilibrium
An allocation of commodities in a pure exchange economy and a specific price ratio such that all individuals are maximizing utility (given initial endowments and prices) and total consumption is equal to total endowment of each commodity
Excess Demand Function
A mathematical representation of the difference, in any particular market, between quantity demanded and quantity supplied as a function of the prices of each commodity and resource in the economy. A market clears if its excess demand function is equal to zero.
Marginal Rate of Transformation
The rate at which the output of one commodity must be reduced as the output of an alternative commodity is increased, assuming resources are being allocated efficiently.
Numeraire
A commodity that is singled out as a standard of value. The prices of all other commodities and resources are measured in relation to that of the numeraire.
Production Contract Curve
Locus of points of tangency between isoquant curves in an Edgeworth production box, characterized by equal marginal rates of technical substitution for each commodity.
Pure Exchange Economy
An economy in which no production takes place, so that economic activity is limited to trading by individuals, each of whom is assumed to be endowed with some initial commodity bundle.
Say's Law
The aggregate value of all goods produced must be equal to that of all resources utilized in production, whether or not the economy is in general equilibrium.
Transformation Curve
The locus of output mixes corresponding to efficient combinations of input: derived from the production contract curve. It is also known as the production possibility curve.
Walras' Law
If all markets except one are in equilibrium, the remaining market must also be in equilibrium.
| Quiz |
|---|
| 2.2 Mes passions à moi |
| espagnolo facil |
| america latina |
| ....1 |
| Family and friends |
| franska glosor kap 9 |
| 123 |
| general science- exam |
| biologia |
| Polislagen 1-10§ |
| la salute e la medicine |
| to rattleto worry someone or make someone nervous: |
| AURORA ARAGON DE NICARAUGA |
| Income Tax PGBP |
| module 2 study |
| HOLA, QUE TAL 3 |
| HOLA, QUE TAL 2 |
| HOLA, QUE TAL |
| KLASSRUMSFRASER |
| LA FAMILIA |
| 5.2 |
| Service |
| 5.1 |
| English-MakingHistory2024 |
| Onderzoek neurologie |
| Språktenta |
| politik |
| Pathologie neuro fysiologie |
| SES |
| religion |
| social studies notes 1/31 |
| Capitals (inverse) |
| FL 4 Kommunikayionssystem |
| cyber security 1-3 |
| HIZTEGIA HARD |
| HIZTEGIA |
| PigsPigs |
| Wordly Wise 3000 lesson 1vocabulary |
| Teeth |
| HT (Context) CRIMBS PPWNG |
| marketing chapter 9 |
| BHV-Toets |
| home services pricing |
| Genetics midterm 1 |
| Anthro week 3 flashcards |
| Antho week 4 quiz |
| emprical studies introbasics - central tendency, spread |
| ak se3thema water en bevolking en ruimte |
| biology B6 |
| unit 6 bio |
| WC Reading Quiz #2 |
| Study-HOSA |
| Supply Chain |
| psychometry |
| trophosphere geographylol |
| chemieorganische verbindingsklassen en monofunctionele verbindingsklassen |
| geography atmosphere |
| Biologi 5.2 Energi och materia + 5.3 |
| Pathologie orthopedie breuken |
| spainsh unit 2 b |
| AP1 |
| Revalida |
| scince test flash cardsstudyy |
| French Vocab Test |
| songbirds and snakes vocab |
| Spanska glosor |
| geo110 |
| french |
| LobstersLobsters |
| Social Terms Jan-Feb |
| Pathologie orthopedie bovenste extremiteit |
| KNSS 307 ( development of human locomotions |
| KNSS 307( Early Motor Development |
| Modern studies testmy test |
| The limbic systemCharlotte |
| English vocabulary |
| Pathology unit 1 |
| History quiz 4 |
| Respiritory system |
| GTF + De taktiska grundprinciperna |
| Fondamentaux Biologie |
| Sampling |
| FL 3 Kommunikationssystem |
| Films test |
| Unit 4 |
| NO |
| geología chuletillas |
| Capitals |
| Économie S4 |
| politics essayessay |
| week 1.2 Term and Lesions |
| Week 2 - Skin Care 2 Assignment - Emollients and Eve Taylor Lotions, Moisturizer |
| week 1.2- Extended Health screening |
| Vocabulary |
| Japanese Phrases (Everyday) |
| geologia |
| Sharks |
| months and order numbers |
| Spanska läxa v.5 |
| spanish 2 2A and 2B |
| phyics 10P1 |
| Réviser les pronoms et les déterminants 5e |
| georaphymap skills key words |
| cree |
| show me tell me motorbikeeee |
| CELLScan you answer the questions |
| Geometryanswer these |
| Forensic science review |
| Réviser les pronoms et les déterminants 6e |
| Svenska adjektiv mm A |
| mineralen |
| 1) Humble 2) Serendipity 3) Tedious 4) Riposte 5) Outlandish 6) Benevolent 7) Ba |
| english exam gr 10 |
| loayمشهور طالب نشيط |
| Population Vocab |
| vitamines |
| Biology/Nask flashcardsVerrie prittie vlesjkarts meet bij Kirsten for bijoloodjie ent nask prodject |
| E-nummers |
| Spierskeletsysteem2 -KTY2 |
| Maths |
| perception: intro- what is perception
- the eye
- prisoners ?
- evolution
-examples
-sensation vs perecption
-camera model
- experimental study |
| Inför fysik-prov (kapitel 6) |
| main practice |
| german 15 |
| multiplying |
| science |
| science plants test unit 3 |
| Business test |
| masu form |
| C1 Level vocabulary |
| Unit 1 Animal Diversity |
| homeworkexam de finance chapitre credit |
| les genresla hierarchie des genres |
| englisch chapter 2 |
| gsJa |
| electronics |
| los verbos |
| science studying |
| matte |
| light reflection |
| physicss |
| combined higher, quantitative chemistry, GCSE flashcardsidk |
| substances - chemistry |
| men and women in the family |
| contraception in islam |
| Anglais: native americans |
| IT Management chapters 1-3 |
| latijn |
| pneumatics and hydraulics |
| Divorce in islam |
| History quiz THREE!!!! |
| Tableau Periodique |
| frankie capuano biopsychology |
| gsce japanese words |
| Organisatiekunde hoofdstuk 10 |
| Albania |
| te form - JPN |
| Special dates |
| Koine Greek Ch. 20-22 |
| enthalpy change |
| Biology topic 5 and 6Communicable diseases, vaccinations, antibiotics and painkillers, investigating antibiotics, discovering drugs, developing new drugs, |
| Les dates de la seconde guerre mondiale |
| sight words |
| ge se3 |
| geschiedenis |
| Organisatiekunde hoofdstuk 9 |
| frenchtbh idk |
| Character Profiles |
| emergency drill |
| CricketsCrickets |
| Examain final sciences |
| HT (dystopian themes and examples)-themes in every dystopian novels
-with examples from HT |
| Words & Phrases 2 |
| Semaine 4 |
| Santé motricité physio cardio vasculaire |
| Exambio |
| Myndigheterden trista delen |
| cosmetology |
| Engelska 2 |
| BiologyIn this biology quiz you will have 60s to answer each question , the questions and answers are ranzomized.
You can see your rank in the leaderboard after each question. |
| OKO |
| kwalitatief onderzoek OKO pb1612 |
| kwalitatief onderzoek |
| anatomie 2 |
| j-ljudet |
| english exam |
| Biology |
| physics |
| social studies |
| SHS - Transformation des organisations et impact sur le travail |
| SHS - Psychologie |
| SHS - Sociologie générale |
| SHS - epistemologie |
| TKAM final vocab |
| Spanish Irregular Preterite Verbs |
| Pathologie orthopedie onderste extremiteit |
| driving test |
| Koine Greek Prepositions |
| Organisatiekunde hoofdstuk 8 |
| nask |
| WHITECHAPLE |
| LT - Natural law (CHAPTER 1) |
| Bio Exam |
| LT - The legal order (CHAPTER 0) |
| LT - Law as a rational system (CHAPTER 1) |
| 5 glosor |
| koine greek ειμί |
| FL 2 Kommunikationssystem |
| maatschappijleer. |
| SOom första världskriget |
| English Literature |
| kemi 1 syror & baser begrepp |
| Ethiek periode 2 |
| Drug tables |
| general science |
| Chemistryok |
| Work |
| Engelska 1 |
| bio se3thema 6,7,10 & 11 |
| Spanska 4 |
| un mundo de fiestas |
| chem exam |
| Automotive |
| how to improve french vocabulary |
| types of houses in french |
| very hard french words |
| Koine Greek Ch. 18 & 19 |
| french words you will see in french books |
| various french house terms |
| parts of the bathroom in french |
| parts of the bedroom in french |
| french |
| The Lung Channel of Hand Taiyin |
| Anatomy and Physiology |
| tyska kap 3bräcka till |
| nl |
| physics flashcards |
| TYSKA FERIEN MAL ANDERS |
| romeo and juliet |
| Nederlands poëzie begrippenAlle begrippen van de poëzie les Nederlands. |
| PKG stoornissen jaar 1 |
| PKG jaar 1 |
| nederlands (lezen) hoofdstuk 1,2 en 3 theorie |
| anglais |
| Historia Källkritikfkn dö |
| An inspector calls |
| Geology |
| Ireland, the green island |
| leverspe |
| Organisatiekunde Hoofdstuk 7 |
| text sobre a Barbie |
| palavras mais usadas |
| FL1 Kommunikationssystemtermer inom kommunikationssystem |
| Grieks 4.1De Ring van Gyges |
| Busnissmodel |
| Politiek en economische handel |
| BMC |
| English Exam |
| Staatsrecht 1 |
| The brain & Limbic system |
| limbic system |
| art definitions and paintings |
| french - |
| french |
| histoireallo |
| ee |
| poets |
| duits 47 tot 52 4 |
| French speaking mock |
| b |
| Psykologi prov |
| Engels Unit 2 |
| duits 47 tot 52 3 |
| HistoryAbolition of slavery |
| Natural Disasters |
| Secu |
| bio test |
| Spanska NP Muntligt |
| spanish |
| Element 3 |
| Edodontic instruments |
| duits 47 tot 52 2 |
| duits 47 tot 52 |
| Frans A+B |
| Grieks 2.2Diotima |
