Economic rationality
A) implies that people have an objective and pursue it in a consistent fashion.
B) implies that people's behavior does not adapt when incentives change.
C) implies that there is no such thing as a free lunch.
D) can be directly proven.

Question

Quizplus · Accepted Answer

Economic rationality assumes that individuals have a clear objective and act in a consistent manner to achieve it, but it does not imply that their behavior cannot be influenced by changes in incentives or circumstances. Economic rationality is a theoretical concept that cannot be directly proven, but it is useful as a tool for understanding and predicting human behavior in economic contexts. The idea that "there is no such thing as a free lunch" is related to the concept of opportunity cost, which is a fundamental principle of economics but is not synonymous with economic rationality.

Economic Rationality