Economists assume that rational people never use all available information as they act to achieve their goals. only weigh the benefits and costs of the most desirable alternative actions. undertake activities that benefit others and hurt themselves. respond to economic incentives.

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Business

Justin Hunter

9 February, 08:07

Economists assume that rational people never use all available information as they act to achieve their goals. only weigh the benefits and costs of the most desirable alternative actions. undertake activities that benefit others and hurt themselves. respond to economic incentives.

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Cohen Kerr · Answer 1

Answer: Respond to Economic Incentives

Explanation:

Economists assume that rational people respond to Economic Incentives because it is a widely held fact in Economics that people choose goods and services based on a cost-benefit analysis and if there are incentives, the scales will be tipped more in favour of the benefits. Rational people will respond by getting that good and/or service.

Examples include cash rewards, bonuses, income and profits which are considered extrinsic incentives. There are also non-monetary incentives known as external incentives such as peer recognition, fame, social status and power.