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.
