Question

Discuss how specific differences, permanent traits or temporary states, in individuals may contradict Homo Economicus ?

Answer 1

Homo economicus maximsies utility for consumers snd economic profit for producers.

However individuals havr changing mindsets and preferences towardspudchasing luxurious goods and discretionary spending when wages rise and hence individuals spend beyond limits which contradiction of maximum utility theory. Changing price points, rise in wagesand employments, higher availability of goods all lead to change in purchases decisions.

Similarly when producers face perfect competition they tend to reduce proces and indulge in predatory pricing which minimises economic profit in search of acquiring new customers and penetration of new markets which again contradicts Homoeconomicus.