Question

One of the primary assumptions of economics is that people are rational and make rational economic choices based on available information. To examine this assumption, consider yourself a sample of one and examine your economic choices.

Respond to the following:

Identify and describe one of your recent economic decisions or choices. (Note that you need not share information you consider confidential.)

Explain why the decision was rational. Give reasons for your answer.

Provide an example where you have encountered increasing opportunity costs.

Answer 1

Ya people are generally rational and makes economic choices on rational bases . Lets me describe my own decision . Being student of commerce backgroup i was trying to search best affortable collages in india . After lot of reserch as per the information i have based on food availability , hostel fecility , transport , fee of courses , placements opportunity , etc . While making the decision i made many comparison based on the information i was having and finally i made the decision to study at jaipur (India ) as the city was good place to visit , low fee structure , excellent atmosphere , hostel fecility . My basic logic behind this decision was of beauty of the city and the fee of the courses offered . Thus i made the decision on logical bases based on the information i was having , making it rational decision .

* Opportunity cost is the cost for the next best alternative

After making the decision of doing bcom at Jaipur . I thought of Doing CA too where is was opportunity cost for me and and making that decision has encoutered inceasing opportunity cost .