Economic decision-making GapFill

Classical economics assumes that individual consumers are  heuristicgreedyrationalaltruistic, and make economic decisions accordingly. However, this assumption is challenged by the school of   behavioural economicsneoliberal economicslaissez-faire economicsneoclassical economics, which contends that a range of   nudgeseconomies of scalecognitive biasesasymmetric information sources are in play when consumers make decisions, which distorts their ability to act rationally. In addition, consumers are often subject to  cognitive biasesdiminishing marginal utilitynudgesasymmetric information when making decisions, which further skews economic models.

An important concept to be familiar with in this regard is the margin. The margin measures the impact of producing or consuming additional units of a good or service already being produced or consumed. Classical economics assumes that people seek to maximise their   rules of thumbaltruismchoicesutility, or personal satisfaction. However, the concept of the margin gives us the theory of   asymmetric informationdiminishing marginal utilitynudgescognitive biases, which states that at a certain point of consumption utility begins to  decreasecollapseincreaseexpand.