Question

A basic assumption in economics is that people are self-interested. On the surface, that could imply that we are selfish since we are doing what is best for us. Provide 3 examples of why self-interested behavior does not necessarily mean selfish behavior.

Answer 1

self interested people are does not mean selfish behavior because the self interest is for the interest of its own which is a good thing and make the individual prosperous ,In market economy , the business and individual own most of the resoruces which is available like capital,land and labor an use decision which are voluntary for their personal benefit and activities in market place and transactions.self interest dominates in captalist economies where there is free exchange of goods and services. This drive the demand and supply of ervices and goods and thier values which leads to innovation .Therefore it is not a selfish behavior but is in the interest of own to make the best econmic outcome .Like the conscept of invisible hand by Smith in 18th century which refers to the iea that when the parties interact and make self interest decisions , there is untintended benefit which is produced at large level in the society .Hence self interest does not man selfish ebhavior  

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