penn101_09s8

penn101_09s8 - General Equilibrium Welfare Theorems Econ...

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Unformatted text preview: General Equilibrium Welfare Theorems Econ 101: Intermediate Microeconomics General Equilibrium and Welfare Jing Li Department of Economics University of Pennsylvania April 2, 2009 Jing Li Intermediate Microeconomics General Equilibrium Welfare Theorems A Simple Exchange Economy Competitive Market Equilibrium in an Exchange Economy The economy as an interconnected system Partial equilibrium: market of good 1 in isolation. Buyers vs. sellers; Income, price for good 2, prices for inputs, etc. are all fixed exogenously. Equilibrium: supply = demand in market for good 1. General equilibrium: all markets considered altogether. Everyone is both buyer and seller; All prices (as well as income) are determined endogenously; Equilibrium: all markets clear simultaneously. Jing Li Intermediate Microeconomics General Equilibrium Welfare Theorems A Simple Exchange Economy Competitive Market Equilibrium in an Exchange Economy The economy as an interconnected system Partial equilibrium: market of good 1 in isolation. Buyers vs. sellers; Income, price for good 2, prices for inputs, etc. are all fixed exogenously. Equilibrium: supply = demand in market for good 1. General equilibrium: all markets considered altogether. Everyone is both buyer and seller; All prices (as well as income) are determined endogenously; Equilibrium: all markets clear simultaneously. Jing Li Intermediate Microeconomics General Equilibrium Welfare Theorems A Simple Exchange Economy Competitive Market Equilibrium in an Exchange Economy The economy as an interconnected system Partial equilibrium: market of good 1 in isolation. Buyers vs. sellers; Income, price for good 2, prices for inputs, etc. are all fixed exogenously. Equilibrium: supply = demand in market for good 1. General equilibrium: all markets considered altogether. Everyone is both buyer and seller; All prices (as well as income) are determined endogenously; Equilibrium: all markets clear simultaneously. Jing Li Intermediate Microeconomics General Equilibrium Welfare Theorems A Simple Exchange Economy Competitive Market Equilibrium in an Exchange Economy The economy as an interconnected system Partial equilibrium: market of good 1 in isolation. Buyers vs. sellers; Income, price for good 2, prices for inputs, etc. are all fixed exogenously. Equilibrium: supply = demand in market for good 1. General equilibrium: all markets considered altogether. Everyone is both buyer and seller; All prices (as well as income) are determined endogenously; Equilibrium: all markets clear simultaneously. Jing Li Intermediate Microeconomics General Equilibrium Welfare Theorems A Simple Exchange Economy Competitive Market Equilibrium in an Exchange Economy The economy as an interconnected system Partial equilibrium: market of good 1 in isolation....
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penn101_09s8 - General Equilibrium Welfare Theorems Econ...

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