Discuss whether you agree with the following statement: "The problem with economics is that it assumes that consumers and firms always make the correct decisions. But we know that everyone makes mistakes."

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Business

Paula Gilmore

9 January, 08:05

Discuss whether you agree with the following statement: "The problem with economics is that it assumes that consumers and firms always make the correct decisions. But we know that everyone makes mistakes."

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Answers (1)

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Justin Mooney · Answer 1

I partially agree with the stament

Explanation:

Despite the economics establishes some theories based in people, companies and governments behavior, we can fine multiple examples where the situation is not totally adjusted to the theory. As an example, when we talk about the supply and demand theory, we suppose that if the price of a product rises, the demand is lower; even when this consumption may be true, there are people who buy this named product no matter the price rises.

We need to see the economist as a theory that defines most of the situations, in the same way it gives the general and specific lines for the development of the most efficient processes and behavior about a determined situation. We can use economics as a way to analyze a situation and take an action trying to have the best result.