Explain the economic assumption that "people are rational."

What will be an ideal response?

"People are rational" means that economists assume consumers and firms will use all available information as they act to achieve their goals. Rational individuals weigh the benefits and costs of each action, and they choose an action only if the benefits exceed the costs.

Economics

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An economy in which people exchange goods and services in a market is called a

A) command economy. B) socialist economy. C) market economy. D) centrally planned economy.

Economics

The U.S. GDP includes

A. wine harvested and bottled in California. B. increases in the divorce rate. C. time spent studying for an exam. D. the exchange of four shirts for four skirts at a consignment store.

Economics