Equilibrium is a state where all the forces within the system are balanced. When at a state of equilibrium, barring external forces, the state is stable and will remain unchanged. In neoclassical thought, equilibriums are thought to be self-regulating and homeostatic. This means that when preturbed, the economy, market, or system will tend back towards equilibrium via built in mechanisms of the structure. A standard example of an equilibrium is a market equilibrium that occurs when quantity demanded equals quantity supplied. In this case a market price is then determined via this price mechanism. Another example of equilibriums that are dealt with in economics are game theoretical equilibriums such as a Nash Equilibrium. This is an equilibrium defined in game theory where none of the participating players have any incentive to deviate. Although no players have incentive to deviate, it is not entirely certain if or how this equilibrium will be achieved. This contrasts with a typical demand and supply equilibrium where the equilibrium will always be achieved in the long run due to the behaviours of consumers and producers. Equilibrium is an important concept that is integral to most models within economics.
The solution looks briefly at the core concepts of supply and demand, the laws of supply and demand, and what constitutes a market equilibrium.
An agent has a daily budget of $240 and her daily utility function is the consumption of two goods, X and Y: U(X, Y) = X Y If the price for good X (Px) is $8 and that for good Y (Py) is $10, what is the best combination of X and Y for the agent's daily consumption?
1. Compare and contrast the three types of unemployment: Frictional Unemployment, Structural Unemployment & Cyclical Unemployment. If you were a policy maker which type of unemployment would be most bothersome to you? 2. What costs are associated with inflation? Explain at least 3 different costs that in
Hello, I am requesting your assistance with only 3 questions in Economics. It is dealing with Competitive Markets. I have attached the reading material as well as the assignment. Your assistance is needed by Sunday, 03/20/16 at 4:25 p.m. (CST). If you are unable to assist me, please let me know. Thanks.
I am prepping for my test (open notes so these I can use). Here are 5 questions (with sub questions). Please look at these questions and please answer them showing work and including excel graphs on the MS word document. It is from the first few chapters of a remedial economics class.
Consider the law of demand and the determinants of demand, the law of supply and the determinants of supply, describe efficient markets theory & explain surplus and shortage. Create a graph illustrating the movement between the two equilibrium points.
Illustrate the following with supply and/or demand curves: a. The federal government "supports" the price of wheat by paying farmers not to plant wheat on some of their land. b. An increase in the price of chicken has an impact on the price of hamburger. c. Incomes rise, shifting the demand for gasoline. Crude oil prices
The supply curve for product X is given by QXS = -480 + 20PX . a. Find the inverse supply curve. P = ____ + Q_____ b. How much surplus do producers receive when Qx = 320? When Qx = 940? When QX = 320: $ When QX = 940: $
Suppose the cross-price elasticity of demand between goods X and Y is -2. How much would the price of good Y have to change in order to change the consumption of good X by 10 percent?
a. What is market equilibrium? Does the market always reach equilibrium? Discuss b. If there is surplus of gasoline in the market, then the price of gasoline will rise. True or false. Explain. Please provide examples for better understanding.
I need help on these presentations slides. Thank you. Requirements: Use a real world experience in free market (not government regulated) to describe a change that occurred in supply or demand as a result of world events that led to the need for a move between equilibrium states. Explain the process of how that movemen
Show the equilibrium price and quantity for a given supply and demand curve and graph their relationship. Annual demand and supply for the Electronic firm is given by: QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5000 + 100P Where, Q is the quantity per year, P is price, I is income per household, and A is advertising ex
Wal mart and other movie DVD retailers including online vendors like amazon.com employ a two steps pricing policy. During the first 6 months following a theatrical release movie DVD buyers are willing to pay a premium for new releases. Total and marginal revenue relations for a typical newly released movie DVD are given by the f
I need assistance to represent this as a graph for scenario a, b, c, and d. Question: Using the demand and supply analysis, explain the changes in the equilibrium price and quantity traded for chicken when the following events take place a. increase in income b. increase in price of fish c. floor price for chicken d. i
Why is equilibrium a desirable condition of the market? What factors move the market away from equilibrium? Explain why in U.S. agricultural markets, quantity supplied almost always exceeds quantity demanded.
Consider an economy in which investment (I) equals 400, government purchases (G) equals 800, taxes (T) equal 600, exports (X) equals 200, and imports (M) equal 250. The consumption function is: C = 100 + 0.8(Y-T) What is equilibrium GDP? What will equilibrium GDP equal if government expenditures increase 200? Wh
Trying to under the concept of equilibrium when dealing with quantity and price?? What happens to the price if the supply increases? What happens to the quantity if supply increases and demand decreases? What happens to price if demand increases followed by supply decreasing and then demand increasing?
In economics, there are three common methods for finding the equilibrium point in any given market: mathematically, graphically, and by inspection. With given information, you may not be able to find the equilibrium price and quantity only one way, so you must be familiar with all three methods in order to be equipped with the