Which of the following best describes an assumption economists make about human behavior?
A)They assume that individuals act rationally all the time in all circumstances.
B)They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time.
C)They assume that people take into account the question of fairness in all decisions they make.
D)They assume that individuals act randomly.

Question

Quizplus · Accepted Answer

Economists make the assumption that people behave rationally in most situations, but they understand that people may not always act rationally due to factors such as emotions, incomplete information, and cognitive biases. However, the assumption of rational behavior is still useful in explaining the choices people make.

Which of the Following Best Describes an Assumption Economists Make