Microeconomics › Section B · Choice in a world of scarcity › Topic B.3
Objections to the economic approach
Knowing the economic approach and being comfortable with it are different things. Critics raise two families of objection - that people don't really decide this way, and that they shouldn't even try - and both are worth taking seriously, because the answers reveal what the models are actually for.
In this topic
- Two families of objection
- 'Nobody actually calculates this'
- Worked example: testing the objection against evidence
- Positive and normative meet the debate
- Is the self-interest assumption cynical?
- Self-interest is not just greed
- The invisible hand
- One diagram, many labels
- Worked example: applying the tradeoff diagram
- Choices, to what degree?
- Common mistakes to avoid
- Key takeaways
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