Economic behavior is rational. People behave according to rational self-interest. People are optimizers. They will chose what they believe to be best under the circumstances. Previously incurred costs or benefits do not ordinarily enter into future decisions, but marginal costs and benefits do.
Prices are signals to producers and consumers.
In a market economy prices determine what goods and services are produced and in what quantities and prices serve to ration what has been produced. Determining an equitable distribution of income is a social and political question not an economic one. Economists can point the way to an efficient allocation of resources but they have no expertise for determining an equitable allocation of resources. Economists analyze the role of government in the economy. We evaluate the effects of the economic policies of government.