Foundations of Alternative Economics
Chapter 2: SOME CONCEPTS, DEFINITIONS & ASSUMPTIONS
19 Chapter 2: SOME CONCEPTS, DEFINITIONS & ASSUMPTIONS Producing various goods and services for consumption in pursuit of profit is an economic event. Mostly, the goods and services supplied contain exchange- values while some of the supply is for personal or family consumption only con- taining use-value. For instance, some households grow their own tomatoes or potatoes on private land or in their garden for household consumption, while many buy them in markets in exchange of money. Some individuals are able to repair their own broken items while others buy a repair service on the open mar- ket for cash. Anything produced for private purposes is beyond the interest and scope of this book. Therefore, the analyses throughout the rest of the book will focus only on economic transactions for markets in pursuit of profit. Supply for personal use will be ignored. We shall start with the definition of the most fre- quently used concepts in economics some of which will be defined somewhat differently than in the teachings of the mainstream doctrines. Some Key Concepts & Assumptions In economic analysis, it is conventional as well as inevitable that some abstract and simplifying assumptions are made using the deductive method. The reason for this is that it is both impractical to and unreasonable to collect and evaluate all the ingredients by using the inductive method. To attempt to do this would be similar to attempting to measure the distance to the sun with a 5cm piece of wood: Possible but highly impractical...
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