When economists assume that people are rational and respond to incentives,they mean
A) people act with kindness.
B) people are altruistic.
C) people act in their own self-interest.
D) none of the above

Question

Quizplus · Accepted Answer

When economists assume that people are rational and respond to incentives, they mean that people act in their own self-interest. This means that individuals make decisions that they believe will benefit them the most, based on their own preferences and constraints. This assumption helps economists to understand how people make decisions in the marketplace and how markets function.

When Economists Assume That People Are Rational and Respond to Incentives,they