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ECONOMIC SCIENCE: The application of the scientific method to economic phenomena. In other words, economists develop theories, test hypotheses, and seek to explain things like prices, unemployment rates, monopolize markets, business cycles, market shortages, and virtually everything else that might be considered economic "stuff." However, economic science is also directed toward phenomenon that might NOT be considered economics, including voting, crime, and leisure. The key element, however, is that all of these, and many more, phenomena related to the fundamental problem of scarcity in one way or the other.
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                           INDETERMINANT: The directional change in a variable, resulting from the disruption of an equilibrium that is identified using comparative statics, is not known. This term is commonly used to indicate that the change in either price or quantity is unknown when the market experiences simultaneous shifts in both the demand and supply curves. For example, an increase in both demand and supply definitely cause an increase in the quantity exchanged. But whether the market price increases or decreases is indeterminant. In some economic models, especially the market model, simultaneous disruptions caused by two or more ceteris paribus factors can generate either known changes or unknown changes in endogenous variables. In those cases where the disruption produces a known change in the direction of the variable (increase or decrease), the change is said to be determinant. In those cases where the disruption does not produce a known change in the direction of a variable (it might increase or it might decrease) the change is said to be indeterminant.Indeterminant Results| Shift | Quantity
Change | Price
Change | Demand and
Supply Increase | Determinant
(Increase) | Indeterminant | Demand and
Supply Decrease | Determinant
(Decrease) | Indeterminant | Demand Increase
and Supply Decrease | Indeterminant | Determinant
(Increase) | Demand Decrease
and Supply Increase | Indeterminant | Determinant
(Decrease) |
Indeterminant results are most often associated with the market model. The simultaneous change in demand and supply, triggered by changes in a demand determinant and a supply determinant, causes the change in either price or quantity to be indeterminant.The table presented at the right summarizes the indeterminant (and determinant) changes in price and quantity for simultaneous shifts of the demand and supply curves. Need to Know MoreThe reason for an indeterminant price or quantity is that the relative magnitude of the shifts of the two curves is unknown. For most introductory comparative static analyses of the market, the only information known is something like "demand decreases and supply increases." HOW MUCH each curve shifts is not often known! If the relative magnitudes of the two shifts are known, then both price and quantity can be determinant. Moreover, with enough information (such as, demand and supply elasticity coefficients) the exact changes in price and quantity can be calculated. Without such information, however, simultaneous shifts of the demand and supply curves mean either price or quantity is indeterminant.
Recommended Citation:INDETERMINANT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: May 20, 2022].
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BEIGE MUNDORTLE
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Today, you are likely to spend a great deal of time watching the shopping channel looking to buy either a birthday greeting card for your aunt or a wall poster commemorating the moon landing. Be on the lookout for broken fingernail clippers.
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Two and a half gallons of oil are needed to produce one automobile tire.
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