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The Sonnenschein–Mantel–Debreu theorem is an important result in general equilibrium economics, proved by Gérard Debreu, Rolf Mantel [], and Hugo F. Sonnenschein in the 1970s.
General equilibrium theory contrasts with the theory of partial equilibrium, which analyzes a specific part of an economy while its other factors are held constant. [1] General equilibrium theory both studies economies using the model of equilibrium pricing and seeks to determine in which circumstances the assumptions of general equilibrium ...
Economics (/ ˌ ɛ k ə ˈ n ɒ m ɪ k s, ˌ iː k ə-/) [1] [2] is a social science that studies the production, distribution, and consumption of goods and services. [3] [4] Economics focuses on the behaviour and interactions of economic agents and how economies work.
The price mechanism, part of a market system, functions in various ways to match up buyers and sellers: as an incentive, a signal, and a rationing system for resources. The price mechanism is an economic model where price plays a key role in directing the activities of producers, consumers, and resource suppliers. An example of a price ...
Modern mainstream economics points to cases where equilibrium does not correspond to market clearing (but instead to unemployment), as with the efficiency wage hypothesis in labor economics. In some ways parallel is the phenomenon of credit rationing , in which banks hold interest rates low to create an excess demand for loans, so they can pick ...
Chapter 25, "A Note on Books", recommends several books for those interested in further reading on economics. He suggests some intermediate-length works, such as Frederic Benham's "Economics" and Raymond T. Bye's "Principles of Economics," as well as older books like Edwin Canaan's "Wealth" and John Bates Clark's "Essentials of Economic Theory."
In macroeconomics, the classical dichotomy is the idea, attributed to classical and pre-Keynesian economics, that real and nominal variables can be analyzed separately. To be precise, an economy exhibits the classical dichotomy if real variables such as output and real interest rates can be completely analyzed without considering what is happening to their nominal counterparts, the money value ...
Economics classes make extensive use of supply and demand graphs like this one to teach about markets. In this graph, S and D refer to supply and demand and P and Q refer to the price and quantity. The following outline is provided as an overview of and topical guide to economics: