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ADJUSTMENT, SHORT-RUN AGGREGATE MARKET: Disequilibrium in the short-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the short-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the short-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases short-run equilibrium is restored. You might want to compare adjustment, long-run aggregate market. Price level changes induce changes in both aggregate expenditures and real production. Unlike the long-run aggregate market, changes in the price level can induce changes in short-run aggregate supply, making it greater or less than full-employment real production.
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MARGINAL UTILITY-PRICE RATIO The ratio of the marginal utility obtained from consuming a good to the price of the good. This ratio is particularly important in determining consumer equilibrium, which is reached when the marginal utility-price ratios are the same for all goods. Equality between all marginal utility-price ratios is the rule of consumer equilibrium which is satisfied with utility maximization.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time flipping through mail order catalogs wanting to buy either a set of luggage with wheels or a birthday gift for your aunt. Be on the lookout for neighborhood pets, especially belligerent parrots.
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This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"Do something wonderful; people may imitate it. " -- Albert Schweitzer, theologian, physician
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CPI-U
Consumer Price Index-All Urban Consumers
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