2 make at least one person better off without making another person worse off: 3 basic concepts to explaining economic behaviour, maximization, equilibrium, efficiency. Mc > mr then it should reduce production. Price taking behaviour is when there are so many firms, most of them small, that actions of no single firm can affect market price of good/service. Distinguish output by brand names, colors, sizes, quality, durability, etc. The theory of asset pricing: present discounted value of an asset: This action imposes an unbargained-for cost on the townspeople downstream: they must incur some additional costs to clean up water or to bring in safe water from elsewhere. 9: decision making under uncertainty: risk and insurance, expected monetary value, suppose an entrepreneur is considering 2 possible projects in which to invest, 1st, d1, involves production of an output whose market is familiar and stable.