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economics assumes that people are selfish?

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One of the key concepts of economics necessarily deals with constrained choices that people make, based on the process of subjectively weighing the perceived costs and perceived benefits of future possible actions.

If people are always weighing costs against benefits, and making choices that presumably benefit themselves, does this mean that economics assumes that people are selfish? What is the relationship between selfishness and economic reasoning?

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Economists do not assume that individuals are selfish. Economists assume that people are purposeful and prudent. The purposes, the ends, could be selfish---die with the most money in the bank. But they could also be generous or noble. A person has ends, goals, loves, priorities, projects, dreams, things that are important to her.

If she's "prudent" by an economic definition she uses the means to ...

Solution Summary

One of the key concepts of economics necessarily deals with constrained choices that people make, based on the process of subjectively weighing the perceived costs and perceived benefits of future possible actions.

If people are always weighing costs against benefits, and making choices that presumably benefit themselves, does this mean that economics assumes that people are selfish? What is the relationship between selfishness and economic reasoning?

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