FARE 1040 Chapter Notes - Chapter All: Opportunity Cost, Institute For Operations Research And The Management Sciences, European Cooperation In Science And Technology

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Economic way of thinking was developed by social theorists. Used to explain how order and co-operation emerge from the uncoordinated interactions of individuals pursuing their interests with ignorance of the interests of those who they are cooperating with. Economics is a theory of choice and its unintended consequences. Only individuals can make choices, either by themselves or in a group. Economizing behavior- interactions placing a strong emphasis on choices by individuals who continually compare expected additional benefits and costs. Economic way of thinking emphasizes the importance of the rules of the game and how they influence our choices, especially regarding property rights. Social property rights assign ownership to society in general (no one in particular) therefore society never makes choices/ decisions. Private property rights assign rights to individuals and can be voluntary traded. Private property rights help form the foundation of the market-exchange economy. A scarce good can only be obtained through sacrifice.

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