Economic theories have an underlying assumption that all individuals are rational. Rational, if taken literally means normal or logical. That is, people shall behave and make decisions to get the optimum amount of benefit (something which is very obvious because of human nature). For example, we will buy goods when prices are lower or produce goods when we get higher profits. Does that mean economics concentrate on the selfishness of human beings (at least in theories)? And if so, is it true?
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Originally published on 19th November 2017.
