When many people think of “economics”, they think of money. However, economics is not purely about...

When many people think of “economics”, they think of money. However, economics is not purely about money but how individuals and societies make difficult choices regarding all kinds of scarce resources. Do you believe that people typically make “rational” choices in their decision-making? In other words, do people typically make choices in their best interest? Why or why not? How do you define “best interest”? Is this different from societal interest? How?

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Expert Solution

Answer : Basically , people make rational choices in procurement of scare resources. Economics is basically a study of rational behaviour of the consumer in which how people allocate there resources in order to satisfied there wants.

There is proper procedure that an individual follows while taking rational decision such as :

Resources for satisfying human wants are limited.
Individual has to prepare the list of there wants and satisfied that want as per requirement.
As we know resources are scare and desireable so we should prepare a list of wants and satisfied utmost important want from the list.
It is study of logical choice of individual in order to a personal interest.

As rational individual people always takes logical and right decision in order to gain maximum share.

Best interest means maximum level of satisfaction that individual has been obtained from using the resources to fulfill their need or want.

Rational decision are different from societal decision because rational decision are taken by individual for there personal interest where as societal decision are taken for the society as a whole.Individual cannot measure society resources and values as they take decisions in which they are maximum satisfied.

Rahul Sunny answered 1 year ago

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