Rational people make decisions at the margin by: a) Following marginal traditions, b) Behaving in a random fashion, c) Thinking in black-and-white terms, d) Comparing marginal costs and marginal benef

Question:

Rational people make decisions at the margin by:

a) Following marginal traditions,

b) Behaving in a random fashion,

c) Thinking in black-and-white terms,

d) Comparing marginal costs and marginal benefits.

Rationality

Consumers in the economy make decisions based on different factors. Purchase decisions, for example, are influenced by the level of income, the availability of substitutes, and the tastes or the preferences of an individual. Rationality in economics implies that consumer decision making is based on getting the maximum level of utility or the optimal use of a resource. Most theories are based on the assumption that individuals taking part in any economic transaction demonstrate rational behavior.

Answer and Explanation:

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Rational people make decisions at the margin by: d) Comparing marginal costs and marginal benefits.

When thinking rationally, consumers look at where…

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