Courses : Intermediate Microeconomics Lecturer : Frischa Adellia Semester : 4th Semester, 2022/2023 Sesion Partial General Equilibrium Partial general equilibrium is a term in economics that refers to a situation where supply and demand exist in equilibrium at a certain price level in a specific market, but there is no equilibrium in all markets in the economy as a whole. In partial general equilibrium, some markets may be in surplus or undersupply, while other markets may be otherwise. In this case, supply and demand in specific markets remain in balance, but not in the overall economy. For example, if there is an oversupply in the used car market, but an undersupply in the fuel market, then even if there is equilibrium in the used car market, the economy as a whole is not. This can affect prices in other markets as well as overall economic growth. Partial generalized balances are often used to analyze the effect of price changes in one specific market on other markets in the economy. Thus, it can help understand how changes in one particular market can affect the balance in other markets in the economy as a whole. Partial general equilibrium is an economic analysis that focuses on price and quantity equilibria in specific markets, while ignoring the effects of changes in other markets. In partial equilibrium, it is assumed that other factors in other markets do not change, so they do not affect the price and quantity in the market being analyzed. An example of a partial general equilibrium is the equilibrium analysis of the sugar market, in which attention is paid only to the equilibrium between supply and demand for sugar, without taking into account the impact of changes in the price of sugar on the market for biofuels or palm oil. Partial equilibrium analysis is often used to evaluate the impact of changes in demand or supply in a particular market, and predict the impact on prices and quantities in that market. However, it is important to remember that partial equilibrium analysis often does not reflect the state of the economy as a whole, because it ignores the complex interactions between different markets. As an alternative, there is also a general equilibrium, which looks at the impact of changes in a particular market on all interrelated markets in the economy. In joint general equilibrium analysis, the assumption is assumed that all markets in the economy influence each other, so changes in one market can affect the equilibrium in other markets. Partial generalized equilibrium is a concept in economic theory that refers to a situation where the balance in one particular market or sector does not affect the balance in another market or sector. In this case, the assumption made is that there are some markets or sectors where prices and quantities are not affected by changes in other markets or sectors. For example, in an economic model that includes both the goods and services market and the labor market, the partial general equilibrium assumption means that an increase in demand in the goods and services market will not affect the price and quantity of labor in the labor market. Instead, the supply of labor is determined by factors such as education level, age, and work experience, as well as the specific qualification requirements required in a particular job. In partial general equilibrium, the assumption of equilibrium in a particular market or sector allows the economy to reach an equilibrium point in each of these markets or sectors separately, without considering the interactions or dependencies between different markets or sectors. Therefore, partial generalized balances can provide a basis for analysis of specific sectors and specific economic policies related to certain sectors or markets. However, keep in mind that in reality, markets or economic sectors are often interrelated and influence each other, so that the balance in one market or sector can affect the balance in other markets or sectors. Therefore, the assumption of partial general equilibrium can be limited in analyzing more complex economic situations. Following are some of the characteristics of partial general balance: 1. Does not consider all economic sectors: The partial generalized balance only considers certain sectors of the economy, and does not consider all sectors. 2. Focus on the effect of changes on a particular sector: The partial general equity focuses on the effect of changes within a particular sector on the markets for goods and services, as well as the markets for the factors of production associated with that sector. 3. Emphasis on price adjustment: Partial general equilibrium emphasizes price adjustment in the short run, as well as on resource allocation in the long run. 4. Assumes that the factors of production are fixed: Partial general equilibrium assumes that the number of factors of production is fixed in the short run, and can only change in the long run. 5. Does not consider the impact of policy changes: The partial general balance does not consider the impact of changes in economic policies on all economic sectors and markets. 6. Can help understand the impact of changes within a specific sector: Partial generalized balances can help understand the impact of changes within a specific sector on the markets for goods and services, as well as the markets for the factors of production associated with that sector.