When we assume people in economics are rational, what does this imply?

In economics, when we assume that people are rational, it implies that individuals make decisions aimed at maximizing their satisfaction or utility based on the information available to them. This concept of rationality suggests that people evaluate different options and choose the one that they believe will provide the best outcome in relation to their goals or preferences.

This perspective assumes that individuals will consider the potential benefits and costs associated with their choices, thereby optimizing their decisions to achieve their specific objectives—whether those involve maximizing pleasure, minimizing costs, or achieving some other personal goal. Rational decision-making reflects an organized pattern of evaluation and planning, which is a foundational assumption in economic theory.

The other options describe behaviors or assumptions that do not align with the concept of rationality in economics. Spontaneous and emotional decisions indicate a lack of a calculated approach. Prioritizing social outcomes over self-interest suggests a deviation from individual utility maximization, and having no access to data contradicts the rational decision-making process that relies on available information to guide choices.