What do economists mean when they say behavior is rational?
Understand the Problem
The question is asking about the concept of rational behavior in economics, and what economists imply when they use the term 'rational'. This generally refers to the assumption that individuals make decisions that maximize their utility based on available information and preferences.
Answer
Individuals making choices to reach their goals.
Economists mean that individuals are making choices which help them reach their goals.
Answer for screen readers
Economists mean that individuals are making choices which help them reach their goals.
More Information
In economics, rational behavior is a decision-making process based on making choices that result in the optimal level of benefit or utility for the individual.
Tips
A common mistake is assuming rational behavior means always making morally or socially acceptable choices. It simply means making goal-oriented decisions.
Sources
- Solved What do economists mean when they say behavior is - Chegg - chegg.com
- Rational Behavior: Definition and Example in Economics - investopedia.com
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