Chapter

General Economic Equilibrium

S. N. Afriat

in Logic of Choice and Economic Theory

Published in print November 1987 | ISBN: 9780198284611
Published online November 2003 | e-ISBN: 9780191595844 | DOI: http://dx.doi.org/10.1093/0198284616.003.0022
 General Economic Equilibrium

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This is the fifth of six chapters on the logic of price. It is concerned with the proper microeconomic theory of general equilibrium understood as serving questions raised by Frederic Bastiat (1801–50) and illuminating Adam Smith's Invisible Hand, and going beyond basic theory of prices and the market. The eight sections of the chapter are: Crusoe's development; Edgeworth's box; three senses of equilibrium (centralized equilibrium, decentralized equilibrium, exchange equilibrium); feasible prices; a Cobb–Douglas world; the hyperbox; production and profit; and lessons in Edgeworth's box.

Keywords: centralized equilibrium; Cobb–Douglas function; decentralized equilibrium; economic models; Edgeworth's box; exchange equilibrium; feasible prices; general equilibrium; hyperbox; market; microeconomics; price; production; profit; theory of general equilibrium

Chapter.  15743 words.  Illustrated.

Subjects: Microeconomics

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