We are all consumers and some of us are entrepreneurs as well. Thus we must all make economic choices. Economic theory helps us understand the workings of the economy as a whole and helps us explain the assumptions that underlie economic choices. For example, consumers must make rational choices that improve their economic and social well-being. Entrepreneurs should choose inputs and the most efficient production model possible. Consumers and producers interact in the goods and services market, each seeking to improve their situation and meet their needs. Thus Economic theory gives us the insights necessary for this interaction to be beneficial to both sides.