Assumptions in Economic Theories: 4 Main Categories
The following points highlight the four main categories of assumptions in economic theories. The categories are: 1. Psychological or Behavioural Assumptions 2. Institutional Assumptions 3. Structural Assumptions 4. Ceteris Paribus Assumptions. Category # 1. Psychological or Behavioural Assumptions: These assumptions are about the individual human behaviour. They refer to rational behaviour of individuals as consumers and producers. As consumers, they [...]