The Rationality Assumption States That

question 292

Multiple Choice

The rationality assumption states that

• A) all actions taken by consumers are based on what is good for society.
• B) people make decisions regardless of how the outcome will affect them.
• C) people make decisions to buy only those goods that they need rather than goods that they want.
• D) people do not intentionally make decisions that would leave them worse off.

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Definitions:

Households

Units consisting of one or more people who live in the same dwelling and share meals or living accommodation; considered as a single entity for economic analysis.

Satisfaction

The feeling of fulfillment or pleasure derived from achieving a goal, satisfying a desire, or meeting a need.

Service Sector

The segment of the economy that provides intangible goods or services to consumers, including healthcare, education, financial services, and retail.

Labor Force

A rephrased definition: This consists of all working-age individuals who are currently employed or actively seeking employment.