Final answer:
The three important ideas in studying economic models are that people are rational, respond to economic incentives, and make decisions based on marginal analysis. While humans may occasionally behave irrationally, economics assumes a general pattern of behavior aimed at maximizing benefits and minimizing costs.
Step-by-step explanation:
Key Ideas in Studying Economic Models
There are 3 important ideas in studying economic models: people are rational, people respond to economic incentives, and economic decisions are made at the margin.
Traditional economic models rest on the assumption of rationality, which holds that individuals use all available information to make informed decisions that benefit their own interests.
Despite the observation that human behavior can sometimes appear inconsistent, or even irrational, the underlying economic theory holds that people's actions reflect a roughly calculated approach to maximizing utility and minimizing costs, albeit not always perfectly.