Asked by
kaitlyn warren
on Oct 14, 2024Verified
In a competitive pure exchange economy, if the total value of excess demand for all types of food is zero, then the total value of excess demand for all nonfood commodities must be zero.
Excess Demand
A situation in which the quantity demanded of a good exceeds the quantity supplied at a given price, often leading to upward pressure on prices.
Competitive Pure Exchange Economy
An economic model where agents trade existing goods without the production of new goods, guided purely by their own self-interest to find an equilibrium.
- Master the fundamental aspects of competitive equilibrium and its implications for prices in pure exchange economies.
Verified Answer
JC
Learning Objectives
- Master the fundamental aspects of competitive equilibrium and its implications for prices in pure exchange economies.
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