Behavioral economics recognizes that people use System 1 to make decisions more often than they use System 2. Which of the following is an implication of that decision-making process?

A. A majority of decisions are not made according to the neoclassical assumption of rational
behavior.
B. Most decisions involve careful calculation of costs and benefits.
C. Even though most decisions are irrational, the neoclassical model still accurately predicts
outcomes.
D. System 1 is best at making optimal decisions.


Answer: A

Economics

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