Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 1: Q 1.3 (page 1)

Evaluate the role that rational self-interest plays in economic analysis.

Short Answer

Expert verified

Rational self-interest leads people to achieve their respective goals which ultimately leads to efficient outcomes for the nation.

Step by step solution

01

Step 1. Rationality

In economics, rationality plays a key role in decision-making. Every individual tries to attain their own personal goals.

02

Step 2. The reason.

Rational-self interest is an important force for economic analysis. Individuals by achieving their personal gains ultimately lead the nation to reach their goals. This rationality assumption is also a key factor that leads us to study various important economic concepts like marginal utility, demand, etc.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Write a sentence contrasting positive and normative economic analysis.

In a single sentence, contrast microeconomics and macroeconomics. Next, categorize each of the following issues as either a microeconomic issue, a macroeconomic issue, or not an economic issue.

(a) The national unemployment rate.

(b) The decision of a worker to work overtime or not.

(c) A family’s choice to have a baby.

(d) The rate of growth of the money supply.

(e) The national government’s budget deficit.

(f) A student’s allocation of study time across two subjects.

Calculate the slope of the function you graphed in Problem A-6.

Distinguish between Normative and Positive Economics.

Which of the following predictions appear(s) to follow from a model based on the assumption that rational, self-interested individuals respond to

incentives?

(a) For every 10 exam points Myrna must earn in order to pass her economics course and meet her graduation requirements, she will study one additional hour for her economics test next week.

(b) A coin toss will best predict Leonardo’s decision about whether to purchase an expensive business suit or an inexpensive casual outfit to wear next week when he interviews for a high-paying job he is seeking.

(c) Celeste, who uses earnings from her regularly scheduled hours of part-time work to pay for her room and board at college, will decide to buy a newly released DVD this week only if she is able to work two additional hours.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free