which of the following situations describes an equilibrium? which does not? if the situation does not describe an eqilibrium, what would an eqilibrium look like?
a. many people regularly commute from the suburbs to downtown Pleasantville. due to traffic congestion, the trip takes 30 minutes when you travel by highway but only 15 minutes when you go by side streets.
b. at the intersection of main and broadway are two gas stations. one station charges $3.00 per gallon for regular gas and the other charges $2.85 per gallon. customers can get service immediately at the first station but must wait in a long line at the second.
c. every student enrolled in ECN 101 must also attend a weekly tutorial. this year there are two sections offered: section A and section B, which meet at the same time in adjoining classrooms and are taught by equally competent instructors. section A is overcrowded, with people sitting on the floor and often unable to see the chalkboard. section B has many empty seats.
a. doesn't make sense.
These sites may help you understand equilibrium.
http://www.investopedia.com/terms/e/economic-equilibrium.asp
http://en.wikipedia.org/wiki/Economic_equilibrium
a. The situation described does not represent an equilibrium. An equilibrium would occur if there was a balance between the number of people using the highway and the side streets, resulting in similar travel times for both routes.
b. This situation also does not represent an equilibrium. An equilibrium would occur if the prices and wait times at both gas stations were similar, resulting in customers being evenly distributed between the two stations.
c. This situation does not represent an equilibrium. An equilibrium would occur if the number of students enrolled in each section of ECN 101 was balanced, with neither section being overcrowded or having empty seats.
To determine which situations describe equilibrium and which do not, we need to understand what equilibrium means in different contexts.
a. In the first situation, where commuting from the suburbs to downtown Pleasantville takes 30 minutes via the highway but only 15 minutes via side streets, this does not describe an equilibrium. An equilibrium in the context of commuting would suggest that both routes take a similar amount of time, resulting in commuters being indifferent between the two options. Therefore, an equilibrium situation would be when commuting times are equal for both routes.
b. In the second situation, where there are two gas stations at an intersection, one charging $3.00 per gallon and the other charging $2.85 per gallon, with a long waiting line at the cheaper station, this does describe an equilibrium. An equilibrium in this context would occur when the price difference between the two stations is just enough to offset the inconvenience of waiting in line. If the price difference was greater, more customers would be willing to wait, and if the price difference was smaller, fewer customers would be willing to wait.
c. In the third situation, where there are two sections, A and B, for a course, and section A is overcrowded while section B has many empty seats, this does not describe an equilibrium. An equilibrium in this context would be achieved when both sections have an equal number of students. The current situation suggests that there is an imbalance in the demand for the two sections, which is creating overcrowding in one and empty seats in the other.
In summary, an equilibrium in different situations can be achieved when there is a balance or equality between different factors or variables. It typically occurs where there is no incentive for individuals or entities to change their behavior or preferences.