Question

Distinguish between partial and general equilibrium approach to economic analysis

Answer 1

Explanation:

the main difference of partial equilibrium and general equilibrium is the determination of price and quantity in the market where by partial deal with only one market while general deal with the market in the economy and their interaction.

Answer 2

Explanation:

The main difference between a partial and general equilibrium models is that in a partial equilibrium model, it assumes that whatever happens in the market that one wants to study does not have any effect on other markets. Hence, in partial equilibrium models, one can only consider a market for an item and assume that the price of every other good or the wealth that is there does not change. In general equilibrium model, every market will have an effect on other markets and so, a change in one market will have its share of influence on other markets and hence one has to model every market at the same time.