Business and Economic Essay

1432 WordsMay 16, 20136 Pages
In the social sciences, economics is the study of human choice behavior and the methodology used to make associated investment and production decisions; in particular, though not limited to, how those choices and decisions determine the allocation of scarce resources and their effect on production, distribution, and consumption. Natural resource extraction and pollution/emissions represent particularly difficult problems as they affect the natural capital (or "resource base") available to market participants and increasingly dominate infrastructural decisions and international trade policy. [1] [2] [3] Also, the psychology of decision making, and the influence that persons have on each other in social groups, especially herd mentality, groupthink and rational choice theory. A majority of Nobel Prize in Economics winners in recent years have studied these problems, some previously dismissed as "intangibles" or "externalities". Economics is largely taught as five specific "schools" of thought: Classical economics, which provided the framework for later developments in microeconomics and both Neoclassical and Marxian theory, focusing on relative competitive advantage, the utility of competitive markets, land development, the labour theory of value and the division of labour Institutional economics, which focuses on the role of institutional design and how institutions shape consumer choice and affect economic performance Marxian economics, which studies the cause of economic crises, the source of value in economics, class relations in society, distribution of the surplus product and surplus value, and the labour theory of value Neoclassical economics, which focuses on price theory, constrained maximization as faced by both producers and consumers, marginal utility and rational choice theory as well as a macroeconomic focus on technical analysis of aggregate

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