The rationality assumption as used in economics A is widely

The rationality assumption as used in economics

A. is widely accepted by other social science disciplines as well.

B. states that people respond to incentives.

C. has been proven by experimental analysis.

D. presumes that everyone can perform sound logical analysis at all times.

Solution

The rationality assumption as used in  states that people respond to incentives. According to this assumption, an individuals are motivated by self interest . A individual twill not make a decision that will make him worse off. Though, it has not been proven by experimental analysis. Moreover, it does not presumes that everyone can perform sound logical analysis at all times.