Economic analysis is based on the premise that
A) people act only out of selfish motives.
B) people are always fully informed when making choices.
C) changes in the personal benefits or costs of an action influence behavior in a predictable way.
D) most human behavior is unpredictable.

Question

Quizplus · Accepted Answer

Economic analysis assumes that individuals respond to incentives, meaning that changes in the costs or benefits of an action will influence behavior in a predictable manner.

Economic Analysis Is Based on the Premise That