Behavioral economics recognizes that people use System 1 to make decisions more often than they use System 2. Which of the following is an implication of that decision-making process?
A) A majority of decisions are not made according to the neoclassical assumption of rational behavior.
B) Most decisions are made following a careful calculation of costs and benefits.
C) Even though most decisions are irrational, the neoclassical model still accurately predicts outcomes.
D) System 1 is best at making optimal decisions.
Correct Answer:
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