Which of the following is best explained with behavioral economics rather than traditional economics?
A)How people purchase apples from a grocery store.
B)How people make tradeoffs between labor and leisure
C)How firms choose prices to maximize profits
D)How people tend to be overconfident in certain situations

Question

​Which of the following is best explained with behavioral economics rather than traditional economics?
A)​How people purchase apples from a grocery store.
B)​How people make tradeoffs between labor and leisure
C)​How firms choose prices to maximize profits
D)​How people tend to be overconfident in certain situations

Quizplus · Accepted Answer

This answer is best explained with behavioral economics because overconfidence is a cognitive bias that affects human decision making, which is a central focus of behavioral economics. Traditional economics assumes rational decision making and does not typically account for cognitive biases.

​Which of the Following Is Best Explained with Behavioral Economics

Which of the Following Is Best Explained with Behavioral Economics