Prerequisite: ECON 7005.
The general equilibrium in an exchange economy of utility maximizing consumers and profit maximizing producers. The approach throughout is that of the neoclassical paradigm. Theorems of welfare economics provide a normative content and lead to a discussion of social welfare and social choice. The analysis of market failure provides a rationale for government intervention, including the collective provision of public goods, taxes to correct for externalities, and social insurance.