ECON111 - The Role of Prices. (1 Viewer)

[MoonLiteDreamz]

Hey,

I was hoping if anyone can tell me what the various roles prices play in the market? I know it vaguely, but i dun wanna guess.

and also.. does anyone have a good website to explain how Edgeworth Box work?

Thanks heaps.

 

[pLuvia]

The roles of prices are for rationiong, allocation, to transmit information from producers to consumers, it gives an estimate to a consumer the amount of utility they might get out of it when they consume the product, it is central in answering the questions of what to produce and how to produce, contributes to efficiency..

that's all i can think of from the top of my head lol. We did in our lectures, the very first few lectures, first topic (if you were with Alan McHarg)

Isn't the edgeworth box used for analysing a contract curve?

 

[dracover]

yes it is but in 111 i think it was for comparing utility functions same thing really.

basically u get one utility function the curve and the possiblity line. u get another one. and join the corners up so u get a box thats basically it. the point of origin is bottom left for the first person and top right for the second person. if u have problems turn ur diagram upside down and think of it as a normal utility diagram and u'll be fine.

 

[MoonLiteDreamz]

hey thanks. I got the info i needed. so it was all good.. I guess.. except they didn't test on that compulsory question.

But I guess more knowledge