In order to maximize society's happiness, we must free up resources which are in lower valued uses and allow them to go to higher valued uses.
Problem 1) Explain and elaborate on this concept.
Problem 2) How can this concept be applied to the activities of profit making companies and profit loosing companies or to the revenue and costs components of a firm's net profit?
Problem 3) Does this mean every activity that loses money decreases society's happiness, and any activity that makes money increases society's happiness?
Problem 4) How can this concept be applied to the "welfare gains from trade" concept in international trade ?