5. The Firm as a Coalition

Thus far, we have established that the economy emanates from each of us. The ultimate renewable resource is people. We are essentially trading portions of our own life span in exchange for others’ products and services. We do this by portioning out our lives between time at leisure and time at work. During that time at work, we produce goods and services that we believe will be valuable to others so that we can trade them for the largest basket of goods and services that we can. The more productive we are, the less leisure time we might need to sacrifice to maintain or establish the quality of life that we desire. Our ultimate desire is to maximize our own utility, that is, happiness.

Moreover, as we do this, ...

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