Which statement is correct, in relation to behavioural economics?

Question

BlackTom AI · Accepted Answer

The prompt presents the question: Which statement is correct, in relation to behavioural economics? It also provides a single listed option and no additional answer choices to compare against.

Option provided: 
- a. Behavioural economics theories are based around the assumption that human beings are motivated by psychological, social and emotional factors.

Analysis of this option: 
- This statement aligns with core ideas commonly attributed to behavioural economics, which emphasizes that human decision-making is influenced by psychological processes (such as biases and heuristics), social context (norms, peer influence), and emotional factors. These elements contrast with the traditional view of economics that assumes purely rational, self-interested agents.
- By highlighting psychological, social, and emotional motivation, the statement captures the broad scope of factors that behavioural economics argues shape choices, including cognitive limitations and contextual influences.

Considerations about the absence of other options: 
- Because the question’s option list is empty beyond the one statement, there is no alternative option to compare for potential distractors or to test understanding of subtle distinctions (for example, whether a statement is too narrow or whether it conflates motives with outcomes). In a typical multiple-choice setting, one would evaluate each choice for accuracy, completeness, and clarity; here we can only assess the given statement against general behavioural economics principles.
- If there were additional options, we would examine each for accuracy (e.g., is the behavior explained as rational optimization, are biases mentioned, is there reference to heuristics, is there a role for nudges, etc.). Since they are missing, the analysis centers on the alignment of the stated option with foundational concepts in the field.

In summary, the provided option reflects a central tenet of behavioural economics by recognizing that decisions are shaped by psychological, social, and emotional factors, rather than assuming purely rational behavior.

MUF0061 Economics Unit 1 - Semester 2, 2025 Revision Quiz - Incentives and Behavioural Economics (8 - 10 minutes)

Which statement is correct, in relation to behavioural economics?

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