neo-classical economics
neo-classical economicsEconomics, as an academic discipline, is predominantly the study of the allocation of scarce resources to alternative uses via market prices. The dominant paradigm in modern economics is neo-classical theory which developed from the so-called marginalist revolution pioneered by Carl Menger, Leon Walras, and William Jevons in the late 19th century. This holds that prices are determined by marginal utility (of consumers) and marginal productivity (of factors of production). Neo-classical theories are based on simple behavioural models at the micro-level (households, firms) which assume perfect information, freedom of movement, individual choice, optimizing and rational decision-making. The basic conditions for these models are private enterprise, consumer sovereignty, and market-clearing prices. Institutional influences on individual behaviour are defined exogenously...
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