This book offers the basic grasp of general equilibrium theory that is a fundamental background for advanced work in virtually any sub-field of economics, and the thorough understanding of the methods of welfare economics, particularly in a general equilibrium context, that is indispensable for undertaking applied policy analysis. The book uses extensive examples, both simple ones intended to bolster basic concepts, and those illustrating application of the material to economics in practice.

A good basic understanding of general equilibrium theory is a fundamental and indispensable background for advanced work in virtually any sub-field of economics; and a thorough understanding of the methods of welfare economics, particularly in a general equilibrium context, is indispensable for investigators undertaking applied policy analysis. This book addresses these needs and requirements by emphasizing the basic underpinnings of general equilibrium and welfare economics. In particular, the theory of choice, which is fundamental to both areas, is developed in a very comprehensive and rigorous fashion. Moreover, extensive use is made of examples, both of the simple type intended to bolster the student’s understanding of the basic concepts, and those illustrating the application of the material to field areas in economics.

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A good basic understanding of general equilibrium theory is a fundamental and indispensable background for advanced work in virtually any sub-field of economics; and a thorough understanding of the methods of welfare economics, particularly in a general equilibrium context, is indispensable for investigators undertaking applied policy analysis. This book addresses these needs and requirements by emphasizing the basic underpinnings of general equilibrium and welfare economics. In particular, the theory of choice, which is fundamental to both areas, is developed in a very comprehensive and rigorous fashion. Moreover, extensive use is made of examples, both of the simple type intended to bolster the student’s understanding of the basic concepts, and those illustrating the application of the material to field areas in economics.

Preface 1 An Introduction to Preference Theory 2 Algebraic Choice Theory 3 Revealed Preference Theory 4 Consumer Demand Theory 5 Pure Exchange Economies 6 Production Theory 7 Fundamental Welfare Theorems 8 The Existence of Competitive Equilibrium 9 Examples of General Equilibrium Analyses 10 Comparative Statics and Stability 11 The Core of an Economy 12 General Equilibrium with Uncertainty 13 Further Topics 14 Social Choice and Voting Rules 15 Some Tools of Applied Welfare Analysis 16 Public Goods 17 Externalities 18 Incentives and Implementation Theory 19 Appendix. Solutions for Selected Exercises References Author Index Subject Index