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> I'm going to assume this refers to the rational actor assumption? Yes. And: * More is better * Demand curves are smooth * Demand curves are deterministic
by worik 4y ago
> I'm going to assume this refers to the rational actor assumption?
Yes. And:
* More is better
* Demand curves are smooth
* Demand curves are deterministic
* Everything happens on the margin
* Information is free
* Ethics does not influence behaviour.
* Nature allows steady states
That are the flawed assumptions just off of the top of my head.
If you spend years studying economics (like I did) then some these assumptions get questioned some of the time. But they all break down, regularly.
The micro economic models work in snapshots, but the interesting part is in the breakdown.
The models are useful when they are not very interesting.
- zubiaur 4y ago“I love the observation that in Chapter 1 of an economics textbook, they'll say, 'We're just describing people as they are. People are rational, and this is how it goes.' And then, in Chapter 2, they'll say, 'And most people fail to'--you know, 'respect the sunk costs.' And they never even notice that there's a small tension there.” — Mary Hirschfeld, discussing her book, Aquinas and the market. She touches on a lot of the points you mention.