When comparing the standard models in the respective fields of economics and psychology,it is clear that
A) both economists and psychologists always assume that people always behave in a fully rational way.
B) both economists and psychologists always assume that people do not act in a fully rational way.
C) neither economists nor psychologists always assume that people always behave in a fully rational way.
D) economists generally assume that people always behave in a rational way,whereas psychologists generally do not.
E) psychologists generally assume that people always behave in a rational way,whereas economists generally do not.

Question

Quizplus · Accepted Answer

Economists traditionally model human behavior on the assumption of rationality, meaning individuals are presumed to make decisions that maximize their utility based on available information. In contrast, psychology, especially in areas like behavioral economics, often focuses on how real human behavior deviates from these rational models, incorporating insights into cognitive biases, emotions, and other factors that influence decision-making.

When Comparing the Standard Models in the Respective Fields of Economics