Behavioral assumptions:
A) make economic models more complex than if these assumptions were removed.
B) pertain only to consumers.
C) hold all other things constant.
D) are ways to test a hypothesis.
E) describe what motivates decision makers.

Question

Quizplus · Accepted Answer

Behavioral assumptions describe what motivates decision makers, which is an important aspect of economic modeling. They do not necessarily make the models more complex, only more accurate and realistic. They can pertain to both consumers and producers, and they are used to understand and predict economic behavior. "Hold all other things constant" is a principle used in experimental design, and while it is important in economics, it is not specific to behavioral assumptions.

Behavioral Assumptions