ABSTRACT
This chapter aims to provide the reader with the main foundations of economic thinking for understanding the book architecture and case-study chapters and for carrying on independent. The reasons why economists need to use mathematical, graphical, and statistical analysis are presented as well as why and how those tools are useful to perform economic analysis. Economics is “the science of choices in a context of scarce resources”. The understanding of human choices in contexts of scarce resources and the valuation and management of scarcity are at the very heart of economic science. In Simon’s definition, economics is a science; therefore, it is based on scientific methods like mathematics, statistics, and econometrics. Economists use models to simplify reality to improve the understanding of the world. The behavioral characteristics of the transaction/exchange generate transaction costs. The theory suggests that each type of transaction produces coordination costs of monitoring, controlling, and managing transactions.
