Distinguish between the following

Partial equilibrium and general equilibrium

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Solution

Basis of Difference Partial Equilibrium General Equilibrium

1. Definition Partial equilibrium refers to equilibrium in one market, assuming that there is no change in other markets General equilibrium is the method of studying equilibrium in different markets simultaneously.

2. Uses It is used in microeconomics. It is used in macroeconomics.

3. Assumption It assumes that other things remain constant. It assumes that the variables are dependent on each other.

4. Process It isolates an individual unit from other forces. It explains the inter relationship and interdependence between aggregate economic variables.

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A (s) ⇌ 2 B (g) + 3 C (g)

C

B

Group "A"	Group "B"
(1) Micro - Economics	(a) Wealth of Nations
(2) Macro - Economics	(b) Harrod and Domar
(3) Theory of Growth	(c) Partial Equilibrium
(4) Lord Keynes	(d) Principles of Economics
(5) Adam Smith	(e) General Equilibrium
	(f) General Theory of Employment Interest and. Money
	(g) Business economics

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Basis of Difference	Partial Equilibrium	General Equilibrium
1. Definition	Partial equilibrium refers to equilibrium in one market, assuming that there is no change in other markets	General equilibrium is the method of studying equilibrium in different markets simultaneously.
2. Uses	It is used in microeconomics.	It is used in macroeconomics.
3. Assumption	It assumes that other things remain constant.	It assumes that the variables are dependent on each other.
4. Process	It isolates an individual unit from other forces.	It explains the inter relationship and interdependence between aggregate economic variables.