The following text is from an economics article.
The traditional economic model assumes that people make rational decisions to maximize their own benefit. Behavioral economists, however, have shown that humans often make choices that contradict this model. People may value fairness over profit, make different decisions based on how options are presented, or stick with default choices even when better options exist. These findings have transformed how economists understand decision-making.
What main point does the text make about human decision-making?
People always try to maximize their personal profit
Economic models are never useful for understanding behavior
Human decisions often don't follow the traditional rational model
Behavioral economics was developed in the traditional model
Correct Answer: C
Choice C is the correct answer. The text states that "humans often make choices that contradict" the rational model, giving examples like valuing fairness over profit.
- Evidence: Multiple examples of non-rational behavior are provided.
- Reasoning: The contrast between traditional model and actual behavior is central.
- Conclusion: People's decisions often don't match rational expectations.
Choice A is incorrect because the text shows people don't always maximize profit. Choice B is incorrect because the text doesn't say models are never useful. Choice D is incorrect because behavioral economics challenges, not supports, traditional model.