Chapter EMB, Problem 1MCQ

To determine

To state: Behavioral economics is a combination of economics and what other field.

Answer to Problem 1MCQ

The correct option is D i.e., psychology.

Explanation of Solution

Behavioral economics combines features of psychology and economics to comprehend why and how people act the way they do in the real world.

Behavioral economics studies the impact of cognitive, psychological, cultural, emotional, and social factors on the decisions of institutions or individuals, such as the way those decisions differ from those understood by classical economic theory.

It is mainly apprehensive of the limits of the rationality of economic agents.

Behavioral models usually mix insights from neuroscience, psychology, and microeconomic theory. The study of behavioral economics includes the way market decisions are prepared and the instruments that can change public opinion.