Custom Writing Help For You!

Special Discounts Offers! 20-30% Off!

Posted: April 19th, 2023

The Aggregate Supply/Aggregate Demand model

The Aggregate Supply/Aggregate Demand model and the microeconomic analysis of demand and supply in particular markets for goods, services, labour and capital have superficial resemblance but they also have many underlying differences. Using relevant examples where applicable, outline and discuss these differences. [12 marks)
The Aggregate Supply/Aggregate Demand (AS/AD) model and microeconomic analysis of demand and supply in particular markets share similarities in terms of their use of supply and demand curves to explain price and quantity outcomes. However, there are significant differences between these two models.

One key difference is that the AS/AD model considers the economy as a whole, while microeconomic analysis focuses on specific markets. In the AS/AD model, the aggregate demand and supply curves represent the total demand and supply for all goods and services in an economy, while microeconomic analysis examines the demand and supply for specific goods or services.

Another difference is that the AS/AD model incorporates macroeconomic variables such as inflation, unemployment, and economic growth, while microeconomic analysis does not. The AS/AD model shows how changes in these variables can impact the overall economy, while microeconomic analysis typically focuses on how changes in price and quantity affect individual markets.

In addition, the AS/AD model assumes that prices and wages are flexible and can adjust quickly to changes in supply and demand, while microeconomic analysis recognizes that prices and wages can be sticky and slow to adjust in the short term. For example, in a particular market for labor, wages may be slow to adjust to changes in supply and demand due to factors such as minimum wage laws or labor union contracts.

Lastly, the AS/AD model assumes that the economy is operating at full employment and potential output, while microeconomic analysis recognizes that markets can be characterized by imperfect competition and market failures, which can lead to suboptimal outcomes.

As such, while both the AS/AD model and microeconomic analysis use supply and demand curves to explain price and quantity outcomes, they differ in their scope, consideration of macroeconomic variables, treatment of price and wage flexibility, and assumptions about market characteristics.

References
Mankiw, N. G. (2020). Principles of macroeconomics (9th ed.). Cengage Learning.

Pindyck, R. S., & Rubinfeld, D. L. (2021). Microeconomics (10th ed.). Pearson.

Tags: ,

Order for this Paper or similar Answer/Assignment Writing Service

Place your order by filling a guided instructions form in 3 easy steps.

Why choose our Study Bay Services?

Like every student, Focusing on achieving the best grades is our main goal

Top Essay Writers

We have carefully cultivated a team of exceptional academic writers, each with specialized expertise in particular subject areas and a proven track record of research writing excellence. Our writers undergo rigorous screening and evaluation to ensure they hold relevant advanced degrees and demonstrate mastery of English grammar, citation style, and research methodology. Recent projects completed by our writers include research papers on topics such as sustainable energy policy, cognitive behavioral therapy, and molecular genetics.

Student-Based Prices

We prioritize attracting highly skilled writers through competitive pay and strive to offer the most cost-effective services for students. References from recent years include surveys of customer satisfaction with online writing services conducted by the American Customer Satisfaction Index between 2018 to 2022, demonstrating our commitment to balancing affordable costs with high standards of work through positive reviews and retention of expert writers.

100% Plagiarism-Free

We guarantee 100% original and plagiarism-free final work through a thorough scanning of every draft copy using advanced plagiarism detection software before release, ensuring authentic and high-quality content for our valued customers. To note, we also do not generate assignment content with AI tool, thus you a guaranteed 0% similarity index for your final research paper.

How it works

When you decide to place an order with Study Pro Essay, here is what happens:

Complete the Order Form

You will complete our order form, filling in all of the fields and giving us as much detail as possible.

Assignment of Writer

We analyze your order and match it with a writer who has the unique qualifications to complete it, and he begins from scratch.

Order in Production and Delivered

You and,the support and your writer communicate directly during the process, and, once you receive the final draft, you either approve it or ask for revisions.

Giving us Feedback (and other options)

We want to know how your experience went. You can read other clients’ testimonials too. And among many options, you can choose a favorite writer.