(BQ) Part 2 book "Microeconomics" has contents: Organizing production, output and costs, perfect competition, monopoly, monopolistic competition, oligopoly, externalities, public goods and common resources, markets for factors of production, economic inequality. | Find more at Making the Most of Life PART THREE UNDERSTANDING HOUSEHOLDS’ CHOICES The powerful forces of demand and supply shape the fortunes of families, businesses, nations, and empires in the same unrelenting way that the tides and winds shape rocks and coastlines. You saw in Chapters 3 through 7 how these forces raise and lower prices, increase and decrease quantities bought and sold, cause revenues to fluctuate, and send resources to their most valuable uses. These powerful forces begin quietly and privately with the choices that each one of us makes. Chapters 8 and 9 probe these individual choices, offering two alternative approaches to explaining both consumption plans and the allocation of time. These explanations of consumption plans can also explain “non-economic” choices, such as whether to marry and how many children to have. In a sense, there are no noneconomic choices. If there is scarcity, there must be choice, and economics studies all choices. The earliest economists (Adam Smith and his contemporaries) did not have a very deep understanding of households’ choices. It was not until the nineteenth century that progress was made in this area when Jeremy Bentham (below) introduced the concept of utility and applied it to the study of human choices. Today, Steven Levitt, whom you will meet on the following page, is one of the most influential students of human behaviour. Jeremy Bentham (1748–1832), who lived in London, was the son and grandson of lawyers and was himself trained as a barrister. But Bentham rejected the opportunity to maintain the family tradition and, instead, spent his life as a writer, activist, and Member of Parliament in the pursuit of rational laws that would bring the greatest happiness to the greatest number of people. Bentham, whose embalmed body is preserved to this day in a glass cabinet in the University of London, was the first person to use the concept of utility to explain human choices. But in .
