ABSTRACT
Popular bands performing music, recording companies producing digital music for sale, local governments building roads, and individuals cooking meals at home are all engaged in the economic activity of production. Decisions about what economic goals should be pursued, and how to choose among competing goals, are up to you, and others, to make for yourselves. A useful way to look at different goals is to rank them in a kind of hierarchy. Some are intermediate goals — that is, they are not ends in themselves but are important because they are expected to serve as the means to further ends. Goals that are sought for their own sake, rather than because they lead to something else, are called final goals. A well-functioning economy is one that operates to increase the well-being of all its members. Positive externalities are the beneficial effects of an economic activity that accrue to those who are not directly involved in the activity.
