Final answer:
Individuals primarily act 'rationally' when making decisions by comparing costs and benefits, although they might use heuristics and cognitive skills, approximating rational behavior as per economic models.
Step-by-step explanation:
Economists believe that individuals act rationally when they compare the benefits and costs of various options to make a decision. However, it's important to note that while individuals may not always act in a perfectly rational and calculating way as described in the economic model of decision-making, measuring utility and costs at the margin, they often behave in a manner that is approximately rational. People use cognitive skills and may rely on heuristics or simple rules of thumb to make decisions that lean towards rationality, ensuring that the value of the perceived benefit exceeds the value of the perceived cost more often than not. When making decisions, economists believe that individuals compare the benefits and costs of various options and act rationally. They weigh the perceived benefits against the perceived costs and choose an action if the value of the benefits outweighs the costs. This decision-making process is based on the assumption that individuals are rational and make choices to maximize their own self-interest.