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1) Your interpretation is correct, when costs are not accounted for in the price someone (either an individual or society as a whole) gets the short end of the

1) Your interpretation is correct, when costs are not accounted for in the price someone (either an individual or society as a whole) gets the short end of the stick. 2) It 100% depends on the good. When you consider species of fish that were driven to extinction by overfishing, there was a significant societal cost that was paid since we completely eliminated that species. 3) Same as point two, the costs and impacts are inseparably linked, since a perfect system would perfectly build in the "cost" of the "impact." Is this what you are asking?

mrow84 13y ago
I think your answers match my intuition, they make a lot of sense. Would you agree that, by virtue of the answers you have given, market theory is almost useless? It seems to suffer from two fatal flaws: 1) You might require a very complete understanding of a particular economic system for market theory to make any useful predictions about it. 2) You can never be sure that you have characterised enough of a given system to make a useful prediction about it (unless you characterise the whole thing, which in practical terms is impossible). Of course we can make (very) educated analyses of any particular situation, and end up with good confidence, but the theory itself doesn't tell us that we are right. So we can never be sure that we aren't just being misled; we can't use the theory to cheaply verify someone's suggestions, we have to go through all of their work to make sure they aren't trying to pull a fast one. Thanks for your time, even if you don't reply to this one, and good luck with your classes!