Which of the following is not a key assumption of microeconomic theory?
a. People do not undertake activities that make others better off.
b. People are self-interested.
c. People have limited resources to acquire their wants.
d. People are rational.
Explanation: There are some key assumptions of economics, which are as follows:
- People are self-interested: It is one assumption that every individual focuses on the things that will enhance their satisfaction and acts as self-interested.
- People are rational: It described that an individual has rational choices for the outcomes that have some values.
- People have limited resources to acquire their wants: This assumption reflects scarcity. It defines that the wants and requirements of the individuals are unlimited, but the resources are limited.
Therefore, “people do not undertake activities that make others better off” is not considered one of the assumptions of economics.