Economists assume that individuals________.
A)behave in unpredictable ways.
B)will never take action to help others.
C)prefer to live in a society that values fairness above all else.
D)are rational and respond to incentives.

Question

Quizplus · Accepted Answer

Economists generally assume that individuals are rational and respond to incentives. This means that people make decisions that maximize their own self-interest based on the information available to them and the incentives that are in place. It does not assume that individuals always act in their own self-interest, but rather that they are driven by incentives to make choices that they believe are in their best interest. This assumption is integral to many economic theories and models.

Economists Assume That Individuals________