Purchase Solution

Ceteris paribus and comparative statics

Not what you're looking for?

Ask Custom Question

Ceteris paribus and comparative statics are commonly vehicles for economic analysis. Explain using the dramatic, large scale expansion of soy bean purchases by China (2003, 2004 and beyond).

Purchase this Solution
Solution Summary

Ceteris paribus and comparative statics are applied.

Solution Preview

Please refer to the attachment.

Definitions:
comparative statics: The technique of comparing the equilibrium resulting from a change in a determinant with the equilibrium prior to the change. Comparative statics is the primary analytical technique used in the study of economics. A popular example of this technique is found in the study of markets. Comparative statics is used to analyze how the equilibrium price and equilibrium quantity are affected by changes in the demand and supply determinants, which are graphically represented by shifts of the respective demand or supply curves.

ceteris paribus: A Latin term meaning that all other factors are held unchanged. The ceteris paribus assumption is used to isolate the effect one economic factor has on another. Without this assumption, it would be difficult to determine cause and effect in the economy. Relaxing the ceteris paribus assumption is the primary analytical technique used in the study of economics, especially for when analyzing the market. Much like a chemist adds one chemical at a time to a mixture to determine the resulting reaction, an economist relaxes one ceteris paribus assumption at a time to observe the results.

The case:
China has also experienced a resurgent economy for the past several years. This increase in income gives the Chinese more money to spend on soybean oil-based products.To address this shortened supply and increasing demand, the soybean checkoff, ...

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • the ceteris paribus assumption

    If the we relax the ceteris paribus assumption and allow the law of demand to operate internationally, a rise in a country's terms of trade leads to a price fall. if the ceteris paribus assumption is removed and the elasticity of demand is high, then

  • Consumer Price Index (CPI)

    d.) real output (Real GDP) people are willing and able to buy at different price levels, ceteris paribus. 9. As the price level rises, ceteris paribus, people holding some of their wealth in monetary form become a.)

  • Economic analysis of events

    What will happen in the jeans market ceteris paribus? 2. A tomato blight hits the South and wipes out most of this year's tomato harvest. What will happen in the tomato market ceteris paribus? See below for your solution. 1.

  • Demand and supply shifts

    a.The impact on the business in the event of real incomes decrease(ceteris paribus).

  • Demand Curve Questions

    A new fad diet sweeps across the nation suggesting the high levels of caffeine and sugar will increase weight loss, decrease blood pressure, and increase life expectancy by 20 years, ceteris paribus.

  • Brain probe

    ["ceteris paribus" is Latin for "all else held constant"]. In short, I would say that the answer is "yes".

  • Comparative statics analysis is

    152073 Comparative Statics Analysis Comparative statics analysis in economics is best illustrated as the comparison of equilibrium points before and after changes in the market have occurred. a comparison of two types of markets.

  • Import Quota

    Those experiences the aggregate and net loss, though, are spread out and unorganized - the consumers. The the "ceteris paribus" (all else held equal) impact of the quota is articulated.

  • The Invisible Hand - Adjustment of Supply and Demand

    For example, the law of demand says that higher the price, the lower the quantity demanded, ceteris paribus.

View More Related Solutions