To conduct a general equilibrium analysis of a change in consumer preferences away from beef and toward chicken, you must consider
A) changes in the equilibrium prices and quantities of beef and chicken.
B) changes in the amount of resources allocated to the production of beef and chicken.
C) changes in the price of resources allocated to the production of beef and chicken.
D) all of the above

Question

Quizplus · Accepted Answer

General equilibrium analysis involves considering all markets and their interactions simultaneously. Therefore, a change in consumer preferences would affect not only the equilibrium prices and quantities of beef and chicken (A) but also the allocation of resources to their production (B) and the prices of those resources (C).

To Conduct a General Equilibrium Analysis of a Change in Consumer