October 21, 1982

President Amin Gemayel has told Washington that Lebanon cannot afford the political costs of a treaty with Israel. News analysis, page A10. UNITED NATIONS, N.Y., Oct. 20 -The Arab countries have quietly abandoned an attempt to expel Israel from the General Assembly, Arab diplomats disclosed today. The diplomats said the decision was made Tuesday at a closed meeting of the 21 members of the Arab League. Instead of seeking to oust Israel this year, they said, the group agreed to express some form of symbolic collective reservation over Israel's credentials.

HIGH POINT, N.C. ''THIS is the first market in two years that has opened on an optimistic note,'' said Robert P. Gruenberg, general manager of the Southern Furniture Market, a wholesale center for more than 1,300 furniture manufacturers based here. ''Since about 60 percent of all furniture is bought on credit, the falling interest rates should have a positive effect on business,'' Mr. Gruenberg said. The optimism was cautious, for no one is sure when the economy will pick up. Furniture sales have been sluggish for several years now and retail-store buyers, who descend on this North Carolina town twice a year to shop furniture-showroom displays, don't seem ready to gamble.

The 1982 Nobel Memorial Prize for Economic Science was awarded today to George J. Stigler, a University of Chicago professor, for his half century of research on the working of industry and the role of government regulation in the economy. The citation by the Royal Swedish Academy of Sciences praised the 71-year-old economist's ''seminal studies of industrial structures, functioning of markets and the causes and effects of public regulation.'' The prize medal, to be presented in Stockholm on Dec. 10, carries with it a cash award of about $175,000. Economists said the prize further increased the prestige and influence of the ''Chicago School'' of economics, which favors monetarism, minimal regulation of industry and reduced government spending.

At the University of Chicago's business school, a popular item of attire is a T-shirt showing a back view of an odd couple of economists strolling together down a leafy walk. The very short one is Milton Friedman, the monetarist who is considered the core of the conservative Chicago school of economics; the very tall one is George J. Stigler, a professor at the business school and a longtime champion of deregulation. Mr. Friedman, 70 years old, won the Nobel Memorial Prize in Economic Science in 1976. Yesterday his friend Mr. Stigler was also awarded that prize. In a telephone interview, the tweedy, whitehaired professor was asked where the two economists parted company. ''Milton's out to save the world,'' he said, ''and I'm out to understand it.''

The stock market's most popular indicator - the Dow Jones industrial average - raced ahead 20.32 points yesterday to finish at 1,034.12, its highest level in nearly a decade. Analysts credited some surprisingly good earnings reports with providing part of the stimulus for the advance. Blue chips led the way, but an impressive majority of issues also shared in a session that saw the Dow extend its phenomenal gain to 257.20 points within 10 weeks. The rally began on Aug. 13, with the industrial average mired at 776.92. At that juncture, declining interest rates and signs of an easier monetary policy by the Federal Reserve Board touched off the advance.