Set 8: Cross-Text Connections
Explanation
PASSAGE
Text 1 Economic rationalism assumes that humans are 'homo economicus'—rational agents who maximize utility. This model underpins much of classical economic theory. Text 2 Behavioral economics challenges this by incorporating psychology. It demonstrates that people often act irrationally due to cognitive biases, such as loss aversion, where the pain of losing is felt more intensely than the pleasure of gaining.
How does Text 2 critique the assumption in Text 1?
Detailed Answer Explanation
This question asks you to compare perspectives from two passages. Text 1: Rational agents. Text 2: Act irrationally/Biases. Critique: Contradicts rationality with psychology. Understanding how the authors relate to each other's views is essential. Identify whether they agree, disagree, or address different aspects of the topic. Focus on their specific claims and conclusions. When comparing texts, first identify each author's thesis or main argument. Then determine how these positions interact: do they complement each other, contradict each other, or address different aspects of the same issue? The relationship between texts reveals deeper meaning.
Key Evidence:
• "challenges this"
• "act irrationally"
• "cognitive biases"
Why others are wrong: A (Challenges it.), C (New field.), B (Utility maximization.).
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