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The Values and Assumptions of Economics
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The Values and Assumptions of Economics
Neoclassical economics is an area in economics that seeks to explain the processes of
producing, pricing, and consuming goods and services. The concept uses supply and demand
to distribute income. Neoclassical economics is significant as it integrates the cost of
production theory from classical economics with marginalism and utility maximization
(Edgeweblime, 2021). The works of Vilfredo Pareto, Leon Walras, and Maria Edgeworth,
among other economists, are conspicuous in neoclassical economics. The concept emerged in
the 1900s, but competition models were introduced more than 30 years later.
Neoclassical economics relies heavily on three fundamental assumptions. All the
approaches and branches under neoclassical economics are dependent on the assumptions.
The first assumption is that people make rational choices between value-asso...
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