What is behavioural economics?
A) The study of how people make wealth-maximising decisions.
B) The study of how people behave in the face of scarcity.
C) The study of situations in which people act in ways that are not economically rational.
D) The study of how people make decisions at the margin.

Question

Quizplus · Accepted Answer

Behavioural economics is the study of how people make decisions that are not economically rational, but instead influenced by cognitive, emotional, and social factors. It combines insights from psychology, sociology, and economics to understand how individuals and organizations make decisions in real-world settings.

Answer: A, D 
 While A and D do involve aspects of decision-making, they do not fully capture the scope of behavioural economics. Wealth-maximising decisions and decisions at the margin are more closely related to traditional neoclassical economics, which assumes that people are rational agents who make decisions solely based on utility and cost-benefit analysis.

What Is Behavioural Economics