In analyzing human decision and action, economists assume that:
A) Scarcity is more important than choice
B) Costs are more important than benefits
C) People's behavior reflects rational self-interest
D) There are scarce resources in the economy

Question

Quizplus · Accepted Answer

Economists assume that people behave rationally and in their self-interest when making decisions and taking actions. This assumption forms the basis of many economic models and theories. It is believed that individuals make choices based on the potential benefits and costs associated with each option, and they will choose the option that maximizes their overall well-being. This assumption helps economist to predict the behavior of individuals in the marketplace, and it plays a central role in many economic analyses. Options A, B, and D are incorrect because while they are true, they do not accurately reflect the primary assumption made by economists about human decision and action.

In Analyzing Human Decision and Action, Economists Assume That