ABSTRACT
In this chapter, the author discusses the following six assumptions: He assumes that are dealing with a closed economy and that conditions are such as to make possible perfect competition or perfect potential competition in all markets. The author assumes that there are no indivisibilities and that there are in consequence constant returns to scale in the economy and that there are no external economies or diseconomies in the community. He assumes that each individual citizen has a given, independent, and consistent set of preferences and In The Stationary Economy that there was no Government expenditure and no Government taxation. The author continues to assume that there is no Government expenditure on goods and services. There are no communal real needs which have to be met by State action. In The Stationary Economy authors were dealing with only two categories of factors of production—labour and land.
