L. Walras Concept of Equilibrium Assignment Example | Topics and Well Written Essays - 2750 words

L. Walras Concept of Equilibrium - Assignment Example Prices are quoted in the market for each commodity at each instant of the trading process; b. The traders are price takers and they behave competitively i.e. the existence of perfect competition; and c. For any commodity, any transaction is not allowed to take place out of the equilibrium. According to Walras (1874), considering any particular market, if all other markets in an economy are in equilibrium, then that specific market must also be in equilibrium. Also, the sum of all excess demands and excess supplies (which have both positive and negative values) must be equal to zero. The equilibrium is attained through a process called â€Å"groping† in which each agent calculates its demand for a particular commodity and submits it to an auctioneer. This auctioneer matches the supply and demand of the commodities and tries to reach an equilibrium price. â€Å"Trading stops† at the point where the demand and supply for all the commodities with positive prices equate and demand for goods with a price of zero does not exceed their supply (Walras, 1954). At this point, equilibrium is achieved by the process of Groping. Answer 2 The two actors i.e. households and firms both face the problem of scarcity and choice. In the case of households, they attempt to spend their scarce resources, i.e. income, on those goods and in such a way that gives them the maximum utility. They have to bear the opportunity cost when they forgo the benefit of one commodity to avail the benefit of another. According to the law of diminishing marginal utility, as a person consumes more and more units of a commodity, he obtains less and less amount of satisfaction from every additional unit that he consumes. A point comes when the additional utility even becomes negative. For instance, over-consumption of drinking water is harmful to health According to the  principle; the total utility is maximized when utilities obtained from each of the commodities consumed become equal. (S amuelson, 1939) The firms face the same problem and they want to utilize their scarce resources, i.e. factors of production, in such a way that maximizes their profits. Just like the households, they too have to bear the opportunity cost when they forgo the usage of one factor to avail the benefit of another factor. The law of diminishing returns is similar to the working of the law of diminishing utility according to which as more and more units of a factor are employed with other factors remaining constant, the marginal product diminishes. Similarly, a point comes when the marginal product becomes negative. For instance, a certain number of units of labor can produce effects on a unit of land. More than enough units cause disturbance and disharmony in the working environment. The principle can also be applied to firms. The total product is maximized when marginal products of all the factors employed become equal. (Samuelson, 1939) Therefore, the two actors have to undergo the same processes to achieve their respective objectives. Answer 3 In Marshallian long-period equilibrium, the economies and diseconomies of scale determine whether an industry will be operating under increasing, decreasing or constant returns to scale. When the economies and diseconomies of scale are equal, they cancel each other and there is no net effect on the industry.  

Research paper over a specific theme portrayed in the sotry Essay

Research paper over a specific theme portrayed in the sotry - Essay Example The involvement in the scenes becomes more and more thorough, and the collective partakers become a social group where in the person experiences identity problems. At first, the unison of the collective is embodied through the expression ‘we all’; afterwards this unison assumes a virtually individual character (Holland 2001). The collective retreats and the centralized responses are disrupted merely when it is stated about Emily that â€Å"she carried her head high† (Holland 2001, 29). The expression...... At the onset the group of partakers of the narrator appears to be distinguished by the collective ‘first person (I)’ because it emerges beside ‘older people’, ‘the ladies’, and ‘people’ (Staton 1987, 88). Afterwards the sentiments and ideas of the ‘we’ circle quite totally mix with those of another group that the notion of a bigger group surfaces, a united group which involves majority of the town folks. At a different scene the entirety of the town, initially called as ‘our’ is evidently denoted as ‘we’. The individually feeble ‘our town,’ which gives the storyteller some extent of detachment from the group, opens up the ‘our’ which permits the storyteller to unite completely with the group (Kirszner & Mandell 1994): â€Å"The day after his death all the ladies prepared to call at the house and offer condolence and aid, as is our custom† (Kirszner & & Mandell 1 994, 78). The involvement in the scenes becomes more and more thorough, and the collective partakers become a social group where in the person experiences identity problems. At first, the unison of the collective is embodied through the expression ‘we all’; afterwards this unison assumes a virtually individual character (Holland 2001). The collective retreats and the centralized responses are disrupted merely when it is stated about Emily that â€Å"she carried her head high† (Holland 2001, 29). The expression ‘some ladies’ function separately, so as to provide supplementary thrust to the event. From then on the communal ‘first person’ once more emerges; the common purpose is hence enhanced and acquires more focus. Soon after the town government, which