Consider the following statement: "the problem with economics is that it assumes that consumers and firms always make the correct decisions. but we know that everyone makes mistakes." what is the most correct response to this statement?

Economics assumes that consumers and firms are rational, not that they always make the right decisions

Explanation:

What Is Rational Behavior?

In economics rational behavior doesn't necessarily mean the right decision but it is based on the fact that consumers and firms consider optimal level of benefits when they make their purchasing decisions.

Economist assumes that everyone think logically or rationally before they embark on any purchasing decisions.

This means a person is able to give a logical explanation about their purchasing behavior and these decision may not always yield material benefits but still may bring emotional one.

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