Behavioral economics incorporates insights from psychology and sociology into traditional economic analysis, examining how people's behavior deviates from the rational utility maximization assumption underlying traditional economics. It seeks to understand how people make decisions and how they respond to various incentives and influences.

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Behavioral Economics

Question 122

Multiple Choice

Behavioral economics

A) is a subfield of psychology that has partially replaced traditional economic analysis
B) is a subfield of economics that explains how people behavior
C) is a subfield of economics that incorporates insights from psychology and sociology
D) provides support for the traditional economic theory of rational utility maximization
E) predicts that demand curves slope upward

Correct Answer: