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Microeconomic Theory                                            Tanima Dutta, Lovely Professional University



                   Notes
                                                Unit-26: General Equilibrium Theory








                                     CONTENTS

                                     Objectives
                                     Introduction

                                      26.1   Problems of Existence, Stability and Uniqueness of General Equilibrium

                                      26.2   The Walrasian General Equilibrium Model
                                      26.3   2 × 2 × 2 Graphical General Equilibrium Model

                                      26.4   Summary
                                      26.5   Keywords

                                      26.6   Review Questions
                                      26.7   Further Readings



                                 Objectives

                                 After studying this unit, student will be able to:
                                   •  Know Problems of Existence, Stability and Uniqueness of General Equilibrium.
                                   •  Study The Walrasian General Equilibrium Model.
                                   •  Understand Graphical General Equilibrium Model.


                                 Introduction

                                 In this unit, you can learn The Walrasian General Equilibrium Theory, Graphical 2 × 2 × 2 General
                                 Equilibrium Model and the significance of general equilibrium, stability and uniqueness problems.
                                 Marginal equilibrium, general equilibrium and other equilibrium theories have included in the first
                                 unit of the book “Concept of Equilibrium”.


                                 26.1   Problems of Existence, Stability and Uniqueness of General
                                        Equilibrium

                                 Problems of Existence, Stability and Uniqueness  of General Equilibrium are included  in general
                                 equilibrium analysis. It is described by the demand and supply curves of marginal equilibrium and
                                 the results are used in general equilibrium analysis.






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