11 The Edgeworth Box The Equilibrium Concept

In this tutorial, the instructor delves into the concept of equilibrium in economics, building upon previous lessons on consumer theory and utility maximization. The video explores the definition of equilibrium as a pair of prices that clear markets, satisfy initial endowments, and maximize utility for all agents. Using an example with two goods (X and Y), the instructor demonstrates how to determine if given prices result in an equilibrium by calculating optimal consumption and verifying market clearing. They conclude by previewing the next video, where they will find the actual equilibrium price.