Which of the following is an erroneous assumption often attributed to the rational choice view in microeconomics?

• A. Individuals always have perfect information when making decisions.
• B. Individuals respond to incentives.
• C. Individuals seek to maximize their utility.
• D. Individuals weigh costs and benefits before acting.

Answer: (A)

Verified step by step guidance

1. Understand the rational choice theory in microeconomics, which assumes that individuals make decisions by maximizing their utility based on preferences and available information.
2. Identify the common assumptions attributed to rational choice: individuals respond to incentives, seek to maximize utility, and weigh costs and benefits before acting.
3. Recognize that one often-misunderstood or erroneous assumption is that individuals always have perfect information when making decisions.
4. Recall that while rational choice assumes individuals use available information efficiently, it does not require that this information be perfect or complete.
5. Conclude that the statement 'Individuals always have perfect information when making decisions' is the erroneous assumption often mistakenly attributed to the rational choice view.