Economists Assume That Rational Behavior Is Useful in Explaining Choices

question 38

Multiple Choice

Economists assume that rational behavior is useful in explaining choices people make

• A)because irrational people do not make economic choices.
• B)even though people may not behave rationally all the time.
• C)because individuals act rationally all the time in all circumstances.
• D)even though people rarely, if ever, behave in a rational manner.

---

Definitions:

Third Parties

Individuals or entities that are involved in a transaction or agreement but are not one of the principal parties.

Return On Assets

A financial metric used to gauge how efficiently a company uses its assets to generate profit.

Common Equity

The amount of ownership interest in a corporation, represented by common stock, that is available to shareholders after debts and liabilities have been settled.

Debt Financing

The raising of capital through the sale of bonds, bills, or notes to individual and/or institutional investors.