When Comparing Partial Equilibrium Effects to General Equilibrium Effects One

question 77

Multiple Choice

When comparing partial equilibrium effects to general equilibrium effects one can conclude that

• A) general equilibrium effects are always larger.
• B) partial equilibrium effects are always larger.
• C) the effects are of equal size.
• D) one cannot determine before the fact which effect is greater.

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Definitions:

Negative Sign

Generally represents an opposite direction of influence or a decrease in a mathematical or statistical context.

Cross-elasticity of Demand

A measure indicating how the demand for one good responds to a change in the price of another good.

Popcorn

A type of corn kernel which expands and puffs up when heated, commonly enjoyed as a snack.

Potato Chips

Thin slices of potato that are fried or baked until crispy and often flavored.