The most important assumption in economics is-  complexity selfishness rationality human error

Q: life example

A: Pareto-optimality belongs to welfare economics and implies social desirability; whereas…

Q: Why do Economic agent make decisions at the margin

A: It is very important that decisions are made at the margin. Economic agent take risk factor and…

Q: A budget constraint model differs from production possibilities model in that, typically O only the…

A: The production possibility curve shows the best combination of two goods that can be produced with…

Q: 3. Find the values of endogenous variables using both substitution and elimination techniques. Qa1 =…

A: A system of equations are simultaneous equations for which we solve for common solutions. There are…

Q: Economic theory assumes consumers are rational.  Still, in practice, we see a lot of irrational…

A: In behavioural economics, economists assume that consumers are always rational and would like to…

Q: What do you understand by the following terms:                  - Bounded rationality…

A: Bounded Rationality - Individuals are considered to be rational when making decisions, however,…

Q: Explain the decision-making of economic agents (graphically and mathematically).

A: Economic agents are nothing but the players the impact and get impacted by the economic events .…

Q: Why is economics often described as the science of constrained choice?

A: The desire and need for goods and services such as food, housing, cloth, and anything that improve…

Q: What are transaction costs? How does opportunistic behavior tend to increase transaction cost?

A: Cost: It refers to the goods and services price that is charged by the producer. The more the cost…

Q: One of the following findings of the behavioral economics is widely adopted by the policy makers…

A: Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social…

Q: By means of two examples,explain the principle that economic agents take decisions at the margin

A: Thinking at the margin means comparing the opportunity costs and the benefits derived from it.

Q: Discuss how the five foundations of economics are related to the concept of rational economic…

A: The five foundations of economics are the following: 1) Incentives- These are the reasons driving…

Q: Joab and his friends used to play a game where they put on a dog's electric fence collar and tried…

A: Economics is a branch of science which deals with the production, distribution, and consumption of…

Q: Why social optimal output more beneficial to society?

A: A socially optimal output is produced at a point when the marginal social cost is equal to marginal…

Q: The problem of choice is called the Economic problem True/False

A: The biggest problem the economy has to deal with is the problem of scarcity which means that the…

Q: How does Homo Economicus influence economic models? Describe an argument against using Homo…

A: In simple terms Homo Economicus refers to the assumption that "human beings are rational" . Most…

Q: How does the principle of duality influence decision-making in economics?

A: Duality signifies the connection that exists between the quantity and price that takes place as a…

Q: Analyze how pareto efficiency is achieved from consumption activities in an economy

A: Human wants are unlimited but the resources to satisfy these wants are limited. Hence there is a…

Q: What is difference between Pareto Efficiency and Pareto Optimality?

A: Pareto Efficiency is making best use of available limited resources as per the tastes and budget of…

Q: Herbert Simon, the Novel Prize-winning economist, described the rational model of decision-making in…

A: The model of Herbert Simon is a decision making model. According to this model, the decision making…

Q: Write down the merits of deductive method of economics? 300 words

A:

Q: Example of marginal analysis with explanation.

A: In financial matters, marginal investigation implies we take a gander at the last unit of…

Q: Why is "choice" an important concept in Microeconomics?

A: Meaning of Microeconomics: The term microeconomics refers to that situation under which the…

Q: Define scarcity, choice, and opportunity cost and explain how they are related and why they are so…

A: Economics  Economics is the study of scarcity and how it impacts a variety of complex social issues,…

Q: Why is market definition important for economic decision making?

A: Market: Market refers to the place where the buyers and sellers contact each other, and this…

Q: 4. Given Y = C + I, + Go C = Co + bYa 1 = lo G = Go T = T, + tY %3D i) Using reduced form, find the…

A: Endogenous variables: The variables which is present within the model , if we consider examples of…

Q: Why is the equality between the marginal benefit and marginal cost of an action an equilibrium…

A: Marginal benefit can be defined as the additional gain after consuming an additional amount of given…

Q: Discuss Simon’s concept of “bounded rationality.”

A: The study of individual psychology by making decisions is known as behavioral economics. It is…