1.

Distinguish between the following: Partial equilibrium and general equilibrium

Answer»
Basis of DifferencePartial EquilibriumGeneral Equilibrium
1. DefinitionPartial equilibrium refers to equilibrium in one market, assuming that there is no change in other marketsGeneral equilibrium is the method of studying equilibrium in different markets simultaneously.
2. UsesIt is used in microeconomics.It is used in macroeconomics
3. AssumptionIt assumes that other things remain constant.It assumes that the variables are dependent on each other
4. ProcessIt isolates an individual unit from other forces.It explains the inter relationship and interdependence between aggregate economic variables.



Discussion

No Comment Found