What do economists generally assume about the capacity of consumers to make decisions?
A) that buyers and sellers have all the information they need to make decisions
B) that buyers acquire information as long as the additional benefits exceed the additional costs of acquiring this information
C) that decision makers never make mistakes
D) that economic decisions result from random behaviour

Question

What do economists generally assume about the capacity of consumers to make decisions?  
A) that buyers and sellers have all the information they need to make decisions 
B) that buyers acquire information as long as the additional benefits exceed the additional costs of acquiring this information 
C) that decision makers never make mistakes 
D) that economic decisions result from random behaviour

Quizplus · Accepted Answer

Economists generally assume that consumers are rational but recognize that they may not have access to all the information necessary to make perfect decisions. Therefore, consumers weigh the costs and benefits of acquiring additional information before making a decision. This concept is known as bounded rationality.

What Do Economists Generally Assume About the Capacity of Consumers