Which of the following is an assumption usually made about markets and market participants by economists?
A)Market participants are interested in maximizing social welfare.
B)Market participants are generally altruistic.
C)Market participants engage in irrational behavior.
D)Market participants confront scarce resources.

Question

Quizplus · Accepted Answer

Economists generally assume that market participants confront scarce resources, which means that they have to make trade-offs and choices about how to allocate those resources. This assumption is fundamental to the study of economics and is considered a basic principle of economic theory. Option A and B are unlikely to be true assumptions as individuals and businesses prioritize their own interests over social welfare. Option C is not considered as true by economists since irrational behavior results in market failures, which contradicts the assumption of a functioning market.

Which of the Following Is an Assumption Usually Made About