The assumption underlying economic theory is that

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Economic theory is based on the assumption that people respond to incentives, both positive and negative. This means that people will make choices based on what they believe will bring them the most benefit or pleasure, and avoid choices that may bring them harm or pain. Incentives can take many forms, not just money, and can include things like social status, reputation, and personal satisfaction. Value judgments can also play a role in economic decisions, as people may be motivated by ethical considerations or personal beliefs. Overall, economic theory recognizes that humans are rational actors who make decisions based on a variety of factors, and that incentives are an important part of the decision-making process.

The Assumption Underlying Economic Theory Is That