The assumption of rational self-interest is an example of a(n):
A) other-things-constant assumption.
B) behavioral assumption.
C) certainty.
D) variable.
E) incorrect decision.

Question

Quizplus · Accepted Answer

The assumption of rational self-interest is a behavioral assumption, as it is based on the belief that individuals act in a way that maximizes their own well-being. It is not an other-things-constant assumption, as it does not hold all other factors constant to isolate the effect of a particular variable. It is not a certainty, as it is only an assumption. It is not a variable, as it is a fundamental assumption in economics. Finally, it is not an incorrect decision, as it is a widely accepted assumption that helps to explain human behavior in economic transactions.

The Assumption of Rational Self-Interest Is an Example of A(n)