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Which of the following is the basis for the economist's theory of human decision-making?

a. Individuals act rationally to make society as well off as possible.
b. Individuals act rationally to make themselves as well off as possible.
c. Individuals compete to have the most stuff.
d. Individuals choose the options that sparkle the most and have the brightest colors.

1 Answer

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The basis for the economist's theory of human decision-making is:

b. Individuals act rationally to make themselves as well off as possible.

This is known as the principle of rational self-interest, which assumes that individuals make decisions based on their own self-interest and desire to maximize their own benefits or utility. This principle forms the basis of many economic models and theories, including supply and demand, market equilibrium, and game theory.
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