The cornerstone of all microeconomics, indeed of all questions with an economic content, is choice. To many economists the rigorous development of a theory of choice has been seen as less important than the important results concerning resource allocation which can be derived from it. Possibly this has been because of the need for practical application of the results of theoretical exercises, but the hiding of an explicit choice theory behind the concepts of utility and indifference has often served to confuse and hinder the acceptance and application of the tools of economics to many problems. Yet ultimately economics is not about as abstract an idea as resource allocation, it is about choice, choice of the individual as to what to do, where to go, what to buy, choice of the producer as to what and where to produce and how, choice of the community how to live and so on.
KeywordsIncome Clarification Baumol
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