ABSTRACT
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book develops from its foundations the simplest kind of general equilibrium analysis, the so-called 'two-by-two-by-two' model of general equilibrium. The two-by-two-by-two model presented in the book is in the field of pure and comparative statics. The analysis of the book will be simplified by assuming the absence of externalities and a competitive system, of production, so that all normative problems appear on the consumption side of the economy. It discusses explicitly or implicitly on Paretian lines, through the postulation of a set of 'community indifference curves' exactly analogous to the indifference curves that represent the preferences of the individual consumer but presumed to represent a community preference system. The book is concerned with the effect of relaxing the assumption of a fixed factor endowment and fixed demand preference functions on the general equilibrium outcome.
