Partial Equilibirum models Flashcards
What does price elastic means?
That they react on price changes
Which are typical features of equilibrium models?
Flexible prices and elastic demand
What does shadow price means?
Estimated price for something that isnt normally priced or sold on the market
How is partial equilibrium different than general?
It focus in just a part of the economy
How can environmental issues be integrated in PE?
Emission factor, environmental damage functions, impact of taxes, subsidies, env regulations and other policy instruments
How environmental damage functions can be integrated?
Into utility or production functions
How taxes are implemented?
As a price wedge between producer and consumer prices
What are some strengths of PE?
Flexible prices and quantities, the possibility to represent non-linear relationships, using bottom-up data
What are some weaknesses of PE?
Anything not explicitly modelled is a constant, non standard framewrok that applies to all PE
