The Robinson-Crusoe story is very useful because it exemplifies the basic economic decisions faced by a consumer-producer household. Moreover, this basic model can be readily extended into several directions: (1) A second individual enters the stage (Friday); (2) endogenous "labour supply"; (3) learning-by-doing effects; (4) search for new and better technologies (R&D); (5) investment in physical capital; or (6) uncertainty. Economists do not assert that "Robinson Crusoe" actually sits down and calculates the optimal solution. Indeed, this would probably a waste of scarce resources (time). What economic theory suggests is this: In order to understand the behavior of Robinson Crusoe (positive theory) the underlying model can be fairly helpful. Specifically, it appears reasonable to assume that Robinson Crusoe behaves rational in the sense of maximizing utility subject to scarcity and technological constraints. The decisions taken are then determined by preferences and technology. Source: Robinson_Crusoe_Economy