the traditional economic framework assumes that people make rational economic decisions, that is, that they…

the traditional economic framework assumes that people make rational economic decisions, that is, that they act in ways that maximize their utilities. however, behavioral economists have found evidence that is inconsistent with economists rationality assumptions. which of the following is an example of evidence of irrational behavior? (note: read carefully.) some stock market investors rush to invest their money when stock prices are rising rapidly. some people are willing to drive an extra mile to save $10 on a $50 purchase but not to save $5 on the same purchase. a lower price tends to increase the number of buyers of a commodity.

the traditional economic framework assumes that people make rational economic decisions, that is, that they act in ways that maximize their utilities. however, behavioral economists have found evidence that is inconsistent with economists rationality assumptions. which of the following is an example of evidence of irrational behavior? (note: read carefully.) some stock market investors rush to invest their money when stock prices are rising rapidly. some people are willing to drive an extra mile to save $10 on a $50 purchase but not to save $5 on the same purchase. a lower price tends to increase the number of buyers of a commodity.

Answer

Brief Explanations:

In traditional economic rationality, decisions should be consistently utility - maximizing. In the first option, rushing to invest during rapid price rises can be due to herd mentality rather than rational analysis. In the second option, the willingness to drive extra for a $10$ - saving but not for a $5$ - saving shows inconsistent valuation of time and money, which is irrational. The third option is a normal demand - price relationship and is rational.

Answer:

Some stock market investors rush to invest their money when stock prices are rising rapidly; Some people are willing to drive an extra mile to save $10$ on a $50$ purchase but not to save $5$ on the same purchase.