Difference Between Partial and General Equilibrium
| Partial Equilibrium | General Equilibrium |
|---|---|
| • Developed by Alfred Marshall. | • Léon Walras was first to develop it. |
| • Related to single variable | • More than one variable or economy as a whole is taken into consideration |
• Based on two assumptions-
|
• It is based on the assumption that various sectors are mutually interdependent.
There is an effect on other sectors due to change in one. |
| • Other things remaining constant, price of a good is determined | •Prices of goods are determined simultaneously and mutually.
Hence all product and factor markets are simultaneously in equilibrium. |
Read more about this topic: Partial Equilibrium
Famous quotes containing the words difference between, difference, partial, general and/or equilibrium:
“The difference between patriotism and nationalism is that the patriot is proud of his country for what it does, and the nationalist is proud of his country no matter what it does; the first attitude creates a feeling of responsibility, but the second a feeling of blind arrogance that leads to war.”
—Sydney J. Harris (1917–1986)
“The first idea that the child must acquire, in order to be actively disciplined, is that of the difference between good and evil; and the task of the educator lies in seeing that the child does not confound good with immobility and evil with activity.”
—Maria Montessori (1870–1952)
“America is hard to see.
Less partial witnesses than he
In book on book have testified
They could not see it from outside....”
—Robert Frost (1874–1963)
“Some people are under the impression that all that is required to make a good fisherman is the ability to tell lies easily and without blushing; but this is a mistake. Mere bald fabrication is useless; the veriest tyro can manage that. It is in the circumstantial detail, the embellishing touches of probability, the general air of scrupulous—almost of pedantic—veracity, that the experienced angler is seen.”
—Jerome K. Jerome (1859–1927)
“When a person hasn’t in him that which is higher and stronger than all external influences, it is enough for him to catch a good cold in order to lose his equilibrium and begin to see an owl in every bird, to hear a dog’s bark in every sound.”
—Anton Pavlovich Chekhov (1860–1904)