In the field of Behavioral Economics, we challenge the concept that:

A) consumers behave in the manner described by the constrained maximization problem.
B) firms have incomplete knowledge of production technologies.
C) firms choose combinations of labor and capital that may not minimize cost.
D) psychological factors have little to do with consumer and producer decisions.

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Raynaldi Surya Kurniawan · Accepted Answer

Final Answer : A, Explanation :  Behavioral economics challenges the assumption that consumers always act as rational actors striving to maximize their utility within the constraints of their budget. This assumption is central to the traditional economic approach based on the constrained maximization problem. Behavioral economists argue that people's decisions are often influenced by psychological factors such as emotions, biases, and social norms, which can lead them to deviate from the rational model of decision-making. The other options (B, C, and D) are not directly challenged by behavioral economics, although they may be examined in different ways or with different assumptions than traditional economics.

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