Final answer:
Desmond's method of considering both costs and benefits before purchasing an electronic gadget is an example of behavioral economics, which differs from neoclassical economics by factoring in psychological and social influences on decision-making. This is relevant at individual, firm, and governmental levels, reflecting the complexity of economic choices interwoven with societal pressures and ethical considerations.
Option 'd' is the correct.
Step-by-step explanation:
When Desmond evaluates the latest electronic gadget and optimizes his research according to the costs and benefits of acquiring information, his approach aligns with behavioral economics, an aspect of economic theory that explores how psychological, cognitive, emotional, cultural, and social factors affect the decisions of individuals and institutions.
Behavioral economics departs from the assumptions of neoclassical economics, which theorizes that individuals are rational agents making decisions to maximize utility. Instead, it acknowledges that real-life decision-making is messy and influenced by a variety of human factors.
This is evident in everyday actions like grocery shopping, where people have developed keen skills at selecting goods that maximize their utility.
Democracy plays a role too, as government institutions are pressured by the electorate to make broadly beneficial decisions, demonstrating how societal choices can be evaluated through the same lens as individual and firm behaviors. The critical discussions around morality, self-interest, and societal well-being in economic actions provide depth and cultivate a comprehensive understanding of how economics intersects with human behavior.