The correct answer is: A. everything depends on everything else.
General equilibrium analysis is a branch of economics that studies the interdependence of markets. It assumes that all markets are interrelated and that changes in one market will have effects on other markets. This is in contrast to partial equilibrium analysis, which studies a single market in isolation.
The statement “everything depends on everything else” is a key concept in general equilibrium analysis. It means that changes in one market will have ripple effects throughout the economy. For example, if the government increases the minimum wage, this will increase the cost of labor for businesses. Businesses may then respond by raising prices, which will reduce demand for goods and services. This could lead to job losses and a decrease in economic output.
The other statements are not as closely associated with general equilibrium analysis. Statement B, ceteris paribus, means “all other things being equal.” This is a common assumption in economic analysis, but it is not specific to general equilibrium analysis. Statement C, the equilibrium price of a goods or service depends on the balancing of the forces of demand and supply for that goods or services, is a basic principle of economics that is not specific to general equilibrium analysis. Statement D, the equilibrium price of a factor depends on the balancing of the forces of demand and supply for that factor, is also a basic principle of economics that is not specific to general equilibrium analysis.