What is homo economic?

Homo Economis is a theoretical concept that describes people as an individual in terms of economic behavior. Economists use this theory to create the generalization of the expected rational behavior according to the theory of the economy. When combining their own interest and theory of economic usefulness, economists expect people to decide which results in the highest satisfaction between several possible elections. In short, Homo Economis is an amoral individual who decides and judgments that lead to the expected or planned end. John Stuart Mill, Adam Smith and David Ricardo presented the theories concerning Homo Economitus. Mill's theory states that any person decides to allow him to earn a lot of wealth. Smith and Ricardo parrled this theory by writing about the ability of individuals to take decisions that best benefit their lives. Each decision includes rational behavior and is missing in a specific direction given by the external forces.

Economics is social science.At best, the prerequisites are created or interpreted from data by mere approximation. Creating economic models allows economists to predict how an individual or group of individuals decide on certain conditions. The use of rational theory to issue the assumptions of behavior is necessary to understand the logic for the choice of homo economy. Identification of variables is also possible because established new conditions can change individual behavior.

Unfortunately, an attempt to place too much psychological analysis in the Homo Economis study is the disadvantage of this theory. For example, the claim that current weather conditions can affect the purchase and sale of shares is an absurd proposal. Scientists who are constantly trying to draw the distinguishing Amonag can disrupt this study by two or more non -linear events. Identification of non -existent factors can also distort the future study of this economic theory.

dA mistake in the theory of Homo Economitus is the faith of the economists that a rational person has too much understanding of economic theory. When deciding the most rugged or logical choice, the basic assumption that each individual understands the consequences of his decision from a macroeconomic and microeconomic point of view. For example, the individual makes the most rational decision to purchase on the basis of the current level of inflation or purchasing power.

For this model, the absence of education, opinions and social context of economic decisions is even more important. The theory also gives up the assumption that an individual can choose on the basis of current trends or other influences. This theory also lacks preference. Substantial goods can affect how the individual chooses the goods he buys. Strong substitute goods can force a rational individual to change their normal behavior and weaken the theory of homo economis.