Search results
Results From The WOW.Com Content Network
Agricultural markets are a context where the cobweb model might apply, since there is a lag between planting and harvesting (Kaldor, 1934, p. 133–134 gives two agricultural examples: rubber and corn). Suppose for example that as a result of unexpectedly bad weather, farmers go to market with an unusually small crop of strawberries.
Figure 5: Equilibrium in both production and consumption in the Robinson Crusoe economy. At equilibrium, the demand for coconuts will equal the supply of coconuts and the demand for labour will equal the supply of labour. [5] Graphically this occurs when the diagrams under consumer and producer are superimposed. [7] Notice that, MRS Leisure ...
Equilibrium in perfect competition is the point where market demands will be equal to market supply. A firm's price will be determined at this point. In the short run, equilibrium will be affected by demand. In the long run, both demand and supply of a product will affect the equilibrium in perfect competition.
For example, buyers and sellers are two common types of agents in partial equilibrium models of a single market. Macroeconomic models , especially dynamic stochastic general equilibrium models that are explicitly based on microfoundations , often distinguish households , firms , and governments or central banks as the main types of agents in ...
In mathematical economics, the Arrow–Debreu model is a theoretical general equilibrium model. It posits that under certain economic assumptions (convex preferences, perfect competition, and demand independence), there must be a set of prices such that aggregate supplies will equal aggregate demands for every commodity in the economy.
In psychology, a drive theory, theory of drives or drive doctrine [1] is a theory that attempts to analyze, classify or define the psychological drives. A drive is an instinctual need that has the power of driving the behavior of an individual; [2] an "excitatory state produced by a homeostatic disturbance".
The equilibrium concept of Debreu is a special case of this equilibrium. The following conditions are sufficient for the existence of equilibrium in the generalized abstract economy: [3] (a) Each choice-set is compact, non-empty and convex. (b') Each action-correspondence is continuous.
Equilibrium may also be economy-wide or general, as opposed to the partial equilibrium of a single market. Equilibrium can change if there is a change in demand or supply conditions. For example, an increase in supply will disrupt the equilibrium, leading to lower prices. Eventually, a new equilibrium will be attained in most markets.