When economists say that people act rationally in their self interest, they mean that individuals _______?
Correct answer: A. look for and pursue opportunities to increase their utility
- A. look for and pursue opportunities to increase their utility
- B. generally disregard the interests of others
- C. are mainly creatures of habit
- D. are unpredictable
Explanation
Rational self-interest means seeking choices and opportunities expected to increase personal utility, or satisfaction. It does not imply that people always ignore others, since helping others may also provide satisfaction.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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