Question

Which of the following is a complaint leveled against the theory of Homo economicus posited by certain economists of the later 19th century?

A. It assumes that the average person knows a lot more about the general workings of the economy than he or he actually does.
B. It assumes that humans experience a proportional and linear emotional response to ALL risks and rewards.
C. It assumes that the primary impetus behind human decision making is not predicated on ethics or cultural mores.

Answer 1

The correct answer is option B. It assumes that humans experience a proportional and linear emotional response to ALL risks and rewards.

Step-by-step explanation:

One of the main complaints against the Homo economicus theory is that it over-simplifies human behavior by assuming that individuals are purely self-interested and ignore other facets of human nature, such as altruism and ethical considerations.

Economists have addressed this critique by referring to the works of Adam Smith, who acknowledged the complexity of human motives in his book, The Theory of Moral Sentiments. Smith highlights that despite our self-interest, there are principles in our nature which make us interested in the well-being of others.

Moreover, the theory of Homo economicus is criticized for not acknowledging the influence of ethics and cultural mores on human decision-making. This critique aligns with option C mentioned in the question. It reflects the view that people's choices are not driven solely by economic self-interest but also by moral values and social norms.