🎴 Flashcard Mode
Economic Rationality and Human Behavior
Card1 / 15
Mastered0
Review0
QuestionClick to flip
What is the fundamental assumption of economic rationality?
AnswerClick to flip back
A
Individuals make decisions based on a rational calculation of costs and benefits.
💡 Explanation:
Economic rationality assumes that individuals are rational actors who make decisions based on a careful consideration of the costs and benefits associated with different choices. This rational calculation is aimed at maximizing their utility or satisfaction.