day 5 part 5 Introduction to Market Equilibrium

Vocabulary and core concepts regarding market equilibrium, optimization, and the convergence of economic systems based on the lecture transcript.

Equilibrium (Behavioral)

A situation in which no one benefits by changing his or her behavior and everyone is economizing or optimizing simultaneously.

Equilibrium (Graphical)

The point depicted as the intersection of the demand curve and the supply curve.

Economizing Buyers

Market participants whose behavior is summarized by demand and represented by the demand curve.

Economizing Sellers

Market participants whose behavior is summarized as the supply relation and depicted as the supply curve.

Convergence to Equilibrium

The economic assumption that systems move toward a state where all possible moves that make individuals better off have been exhausted.

Out of Equilibrium

A situation where at least one person can change their behavior and do better, such as a grocery store with uneven checkout lines.

The Power of Equilibrium

The model's ability to predict social outcomes, such as why lane-switching in traffic often results in the new lane becoming slower once others also move.