Your roommate, Serafina, a psychology major, said, "The problemwith economics is that it assumes that consumers and firms alwaysmake the correct decision. But we know that everyone's human, andwe all make mistakes." Do you agree with her comment?

A) Yes, I agree with her. One cannot make predictions abouteconomic behavior because in reality people make incorrect choicesin many situations.

B) I disagree with her. Economics does not study correct orincorrect behaviors but rather it assumes that economic agentsbehave rationally, meaning they make the best decisions given theirknowledge of the costs and benefits.

C) Yes, I agree with her. Economic theory should allow forirrational behavior so that we can have more reliablepredictions.

D) I disagree with her. If we cannot assume that decisions arecorrect, then we will not be able to examine the moral implicationsof these decisions.