Question

According to behavioral​ economics, consumers A. always behave rationally because they take into account monetary costs and nonmonetary opportunity costs. B. do not always behave rationally because they take into account nonmonetary opportunity costs. C. do not always behave rationally because they accurately project their future behavior. D. do not always behave rationally because they ignore sunk costs. E. do not always behave rationally because they are overly optimistic about their future behavior.

Answer 1

Answer:

E. do not always behave rationally because they are overly optimistic about their future behavior.

Explanation:

Behavioral economics is the study of irrational economic decisions from people's behavior.

Behavioral economics includes the people's emotional framework to make choices beyond the rational choice theory, which states that a rational person is not moved by emotions and social factors to choose the option that maximizes their satisfaction.

To be overly optimistic about your future behavior is biased from social factors and it is a behavior that could be understood from the human emotional framework.

Answer 2

Answer:

The correct answer is letter "E": do not always behave rationally because they are overly optimistic about their future behavior.

Explanation:

Behavioral economists study the reactions of customers and the tendencies they take while purchasing. In most cases, consumers are confident about a purchase but do not take into consideration if the purchase will help them have a better future condition. They tend to believe it will be the same prioritizing the need the item purchase will momentary satisfy. In that case, economist say customers do not act rationally.