Economics Of Family
By the time a student of economics enters the university, he already knows everything, more or less, about this field of study. He knows that the market revolves around self-interest?and if there is anything he, or anyone, clearly understands, it is this very thing. As everyone?s favorite French visitor wrote, ?No vice of the human heart is so acceptable to it as selfishness.? In other words, it comes natural?economics is common sense. However, one thing a student may be surprised to discover is that this is not entirely true. Economics is common sense based on many, many assumptions.
As Adam Smith noted, the actions of private individuals pursuing their own self-interest frequently leads to public benefit only under several qualifications: among which is the precondition of personal and institutional civic ethics, along with the assumptions of an absence of spillover effects (externalities) and the presence of well-informed buyers and sellers. Despite the necessity of these often-unrealistic assumptions, the ?Invisible Hand? has worked exceedingly well in the market of business and monetary transactions. However, this market is not an isolated animal, and decisions made there affect, or spillover into, virtually all aspects
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