Which of the following is a building block of neoclassical economics?

• A. Government intervention in all markets
• B. Production based solely on tradition
• C. Emphasis on historical materialism
• D. Rational choice by individuals

Answer: (D)

Verified step by step guidance

1. Understand that neoclassical economics is built on several key assumptions about how economic agents behave and how markets function.
2. Recognize that one of the fundamental building blocks of neoclassical economics is the concept of 'rational choice,' which means individuals make decisions by logically weighing costs and benefits to maximize their utility.
3. Contrast this with other options: government intervention in all markets is not a core assumption of neoclassical economics, which typically assumes markets tend toward equilibrium with limited intervention.
4. Production based solely on tradition relates more to traditional or institutional economics, not neoclassical economics, which focuses on individual optimization and marginal analysis.
5. Emphasis on historical materialism is a concept from Marxist economics, not neoclassical economics, which is more focused on individual decision-making and market equilibrium.