IT'S nice having The Proposition in Cambridge. The seven-man revue, holding forth weekends in a reconverted Inman Square bakery, is supplying wit, intelligence, and good cheer to the city's sadly standardized entertainment scene.

The Proposition--clearly modeled after the now-famed Chicago improvisational troupes -- strenuously avoids stooping for the easy, gag-line laughs. Trying to create original situational humor, the production occasionally sacrifices a quick laugh in pursuit of something deeper, but that's the course an improvisational group must follow to be more than a cut-rate Neil Simon show. When the sought-after originality breeds laughs, then you've got a winner, and The Proposition wins more than it loses.

The company changes material for each of its four weekend shows, so no particular performance can be predicted. Among the winners in its repertoire to date are a parody of Leonard Bernstein's condescending "Young People's Concerts," a wedding-night sex manual reading (sex is always funny), and an interview with Chancellor Kiesinger on the remnants of Nazism in Germany.

HUMOR needs constant airing. The main reason why the Lampoon never makes anyone really laugh out loud (I hope The Proposition cast won't be too offended by this comparison) is that its pieces, though written by individuals, must be read to the rest of the organization for peer approval. Thus there is a tendency not to include anything strikingly different from what has been accepted before for fear that someone will frown and say, "I don't think that's funny." This is why most Lampoon pieces might just as well be written by the same, mildly amusing, but not really funny, person.

The Proposition's routines are obviously developed in a similar, group atmosphere. But because the cast faces four different outside audiences each week, there is a chance to spring new concepts, and learn through repeated experiment just what will go over (in terms of laughs, not good taste--good taste is the last thing humor needs).

Talent is displayed in that bakery. The two females are fine. Karen Mevn has a nice manic air about her, and looks as though she's just come off fasting for the end of the 100 Years' War. Lori Heineman, a sophomore Cliffie, is quite lovely and quite accomplished; I guess she'll have to fake it on her hour exams this semester. Ken Tigar, a tutor in German here, Paul Jones, and Fred Grandy, possess adaptable faces, voices, and dispositions. Grandy makes good use of his eyelids of all things. Joe Saah mugs too much behind the bass. John Forster is excellent at the piano and does the Bernstein bit well.

An "eighth" member of the cast, Jeremy Levin, hovers in the background. He is credited with writing, directing, producing, and co-composing (with Forster) the show. If he is the source of most of The Proposition's original concepts, he should be congratulated. He should also take Miss Heine man's tests for her.