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Social choice theory is a branch of welfare economics that extends the theory of rational choice to collective decision-making. [1] Social choice studies the behavior of different mathematical procedures (social welfare functions) used to combine individual preferences into a coherent whole.
An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes. Frequently, economic models posit structural parameters. [1]
Vietnam adopted an economic model it formally titled the socialist-oriented market economy. This economic system is a form of mixed-economy consisting of state, private, co-operative and individual enterprises coordinated by the market mechanism. This system is intended to be transitional stage in the development of socialism.
The rational choice model, also called rational choice theory refers to a set of guidelines that help understand economic and social behaviour. [1] The theory originated in the eighteenth century and can be traced back to the political economist and philosopher Adam Smith . [ 2 ]
The social market economy (SOME; German: soziale Marktwirtschaft), also called Rhine capitalism, Rhine-Alpine capitalism, the Rhenish model, and social capitalism, [1] is a socioeconomic model combining a free-market capitalist economic system alongside social policies and enough regulation to establish both fair competition within the market and generally a welfare state.
In macroeconomics, the guns versus butter model is an example of a simple production–possibility frontier. It demonstrates the relationship between a nation's investment in defense and civilian goods. The "guns or butter" model is used generally as a simplification of national spending as a part of GDP. This may be seen as an analogy for ...
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Most economic models rest on a number of assumptions that are not entirely realistic. For example, agents are often assumed to have perfect information, and markets are often assumed to clear without friction. Or, the model may omit issues that are important to the question being considered, such as externalities. Any analysis of the results of ...