What are the basic assumptions in economic studies? A. People are identical. B. There is no...
What are the basic assumptions in economic studies?
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A. People are identical. |
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B. There is no gender difference in consumption behavior. |
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C. People respond to economic incentives. |
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D. People are rational. |
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E. People make decisions based on the analysis of marginal benefit and marginal cost. |
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F. People make the same income. |
Homework Answers
Select B, C D, and E
Rationality lies to the core of economic studies where people are considered self-interested utility maximizing cost minimizing economic agents. They respond to taxes, price changes and other similar incentives. They do have gender differences and are not identical (in terms of preferences). They face different income and prices of goods and services. But they all use marginal analysis of comparing the utility of last dollar spent on goods and services, output of the last dollar spent on hiring inputs, etc
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