Home Economy Economists Assume That Individuals (Answer)

Economists Assume That Individuals (Answer)

Economists Assume That Individuals…

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Economists Assume That Individuals

Question:

Choose the best option about what economists assume motivates individual decisions:

  • Individuals are motivated by greed
  • They are driven by altruism 
  • They decide based on rational self-interest 
  • They act for benevolence sake 

Answer:

Economists assume that individuals are motivated by rational self-interest.

Rational Self-Interest

Rational self-interest is what drives people to make decisions in their day-to-day life.

Economists assume that you and I make decisions and choices in our lives that are best for our own personal objectives, provide us with satisfaction, and advance our own agenda.

This does not mean that we are greedy.

In fact, most people are highly altruistic and help others while at the same time pursuing their own self-interest.

In economics, self-interest means that by pursuing your own goals, objectives, and satisfaction, you make choices that are driven by your needs and wants (your self-interest).

This does not mean that you have acted in a selfish manner or are motivated by greed.

Takeaways 

Economists assume that individuals…?

Economists assume that a firm’s decisions are made in an attempt to…?

Let’s look at a summary of our findings.

  • Question: Economists assume that people are motivated by what exactly when they make decisions in their lives?
  • Answer: Economists assume that individuals are rational beings, act in their self-interest, and respond to incentives 
Economic cost
Economic scarcity 
Macroeconomics 
Normative economics 
Opportunity cost
Principles of economy 
Rational self-interest
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