Question

Indicate whether each of the following examples of behavior is consistent with the way the traditional economic framework suggests people should act, or whether it is reserved for behavioral economists to examine. Example Consistent with the Predictions of Traditional Economic Models Reserved for Behavioral Economics Some people would be willing to make a large sacrifice in order to help a loved one. Some people choose to work fewer hours after receiving a raise at work. Some people prefer to spend an hour doing a task tomorrow to half an hour doing a task today, although the opportunity cost of their time is the same in both periods. Some people treat $70 they earn differently from $70 they win from a lottery ticket.

Answer 1

Answer:

Some people would be willing to make a large sacrifice in order to help a loved one = Consistent with the Predictions of Traditional Economic Models.

Some people choose to work fewer hours after receiving a raise at work = Consistent with the Predictions of Traditional Economic Models.

Some people prefer to spend an hour doing a task tomorrow to half an hour doing a task today, although the opportunity cost of their time is the same in both periods = Reserved for Behavioral Economics.

Some people treat $70 they earn differently from $70 they win from a lottery ticket = Reserved for Behavioral Economics.

Explanation:

The behaviors of people generally cannot completely be predicted. However, there are certain suggestions made on the behaviors of people by the traditional economic framework as well as the behavioral economists. These suggestions have been used by different professional to qualify the behaviors of people in a certain way (as illustrated in the answers above).