Microeconomics

Yet those choices are by no means independent of one another: each individual’s opportunities, and hence choices, depend to a large extent on the choices made by other people. So to understand how a market economy behaves, we have to examine this interaction in which my choices affect your choices, and vice versa.

One last point: economists tend to be skeptical of any attempt to change people’s behavior that doesn’t change their incentives. For example, a plan that calls on manufacturers to reduce pollution voluntarily probably won’t be effective because it hasn’t changed manufacturers’ incentives.