Text 1: Economist Dr. Maria Stone defends rational choice theory. "Individuals maximize utility given preferences and constraints," Stone writes. "This framework explains and predicts behavior across domains. Rationality is a powerful assumption."
Text 2: Behavioral economist Dr. James Wright documents systematic irrationalities. "People exhibit predictable biases—loss aversion, present bias, framing effects," Wright reports. "These violations of rationality assumptions undermine rational choice as a descriptive theory."
What is the key distinction between Stone's and Wright's approaches?
Stone describes behavior while Wright prescribes it
Stone uses an idealized model while Wright documents actual behavioral patterns
Stone denies economics while Wright affirms it
Stone studies individuals while Wright studies groups
Correct Answer: B
Choice B is the correct answer. Stone's rational choice is an idealized framework. Wright documents "predictable" deviations from idealization. Model vs. empirical reality is the distinction.
- Evidence: Stone: theoretical framework; Wright: documented patterns.
- Reasoning: Idealization vs. observation tension.
- Conclusion: Stone offers normative model; Wright offers descriptive evidence.
Choice A is incorrect because both aim to describe. Choice C is incorrect because both practice economics. Choice D is incorrect because both study individual behavior.