Introduction to Mancunian Principles of Economics (English Edition) 3

Originally Ten Principles of Economics 3: Rational People Think at the Margin

Translated Ten Principles of Economics 3: Marginal Analysis is the Way Rational People Think

Originally Economists normally assume that Rational people systematically and purposefully do the best they can to achieve their objectives, given the available opportunities. As you study economics, you will encounter firms that decide how many workers to hire and how much of their product to manufacture and sell to maximize profits. As you study economics, you will encounter firms that decide how many workers to hire and how much of their product to manufacture and sell. You will also encounter individuals who decide how much time to spend working and what goods and services to buy with the resulting income to achieve the highest possible level of satisfaction.

Rational people. By rational people, also known as "rational beings" and "economic beings", we mean that every economically active person is self-interested. It can also be said that the economic behavior of every person engaged in economic activity is to try to obtain their own maximum economic benefits at their own minimum economic cost.

"Economic man" and "broker" should be strictly distinguished. "Broker" mainly refers to real estate agents, insurance intermediaries, celebrity brokers and so on.

Rational people respond to incentives, and bus drivers have different attitudes to work on fixed wages and wages tied to the number of passengers.

Adam Smith argued that selfishness can bring great benefit to society as a whole. He describes it this way: every man will do all he can to use his capital for the greatest good. Generally, he does not intend to serve the public ****, nor does he know himself to be contributing anything to society. All he cares about is his own safety, his own interests. But in this way he seems to be led by an invisible hand, and unconsciously does his best for the improvement of society. In the general case, a man who seeks private gain without the intention of contributing to society contributes far more to society than if he had the intention of doing so.