Short Notes: Neoclassical Economics

Neoclassical economics is the dominant approach to economics currently taught and practiced in most of the world (and especially dominant in Anglo-Saxon countries).  It attempts to explain the behavior of the economy on the basis of competitive, utility-maximizing behavior by companies, workers, and consumers.  Their actions in the markets for both factors of production and final products will ensure that all available resources are fully utilized (that is, the economy is supply-constrained) and every factor is paid according to its productivity.