Question

Suppose the U.S. government encouraged consumers to trade in their old automobiles for more efficient, new models by paying up to $5,000 for the old automobiles. These consumers who did trade in their old automobiles to take advantage of the government offer would be exemplifying the economic idea that

Answer 1

Answer:

people are Rational

Explanation:

Suppose the U.S. government encouraged consumers to trade in their old automobiles for more efficient, new models by paying up to $5,000 for the old automobiles. These consumers who did trade in their old automobiles to take advantage of the government offer would be exemplifying the economic idea that they are rational.

Rationality refers to Purposeful Behavior which means that individuals behave/make choices/decisions that will maximize their satisfaction, pleasure or utility.

Being rational in economics means that people will weigh the cost and benefits before deciding in favor of higher benefits. Hence in the scenario people will love to change an old car for a new one and still get $5000.