Asked by Ingrid Depaz on Jul 01, 2024

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Neoclassical economics and behavioral economics

A) are generally viewed as complementary, together providing better understanding of economic behavior than each could on its own.
B) are diametrically opposed to each other.
C) generally address different issues in economics and therefore rarely intersect on the same topic.
D) both start from the premise that people are fundamentally rational in their decision making.

Neoclassical Economics

An economic theory that focuses on how individuals' rational behavior and efficient markets lead to an allocation of resources that maximizes utility and profit.

Behavioral Economics

This discipline of economics examines the role of psychological, cognitive, emotional, cultural, and social aspects in shaping the economic choices of both individuals and institutions.

  • Comprehend the essential distinctions between neoclassical economics and behavioral economics.
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KH
Kylee Hoskey5 days ago
Final Answer :
A
Explanation :
Neoclassical economics and behavioral economics are often seen as complementary because they offer different perspectives on economic behavior. Neoclassical economics focuses on rational, utility-maximizing behavior within markets, while behavioral economics incorporates psychological insights into economic models, addressing the ways in which actual human behavior deviates from the purely rational. Together, they provide a more comprehensive understanding of economic phenomena by acknowledging both the idealized rational behavior and the often-irrational reality of human decision-making.