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What assumption expected utility theory does not make about people and firms?
a) People and firms are self-interested entities
B) People and firms try to maximize their desired outcomes (utility for people and profits for
firms) under resource constraints.
C) People can rank rationally possible outcomes and make independent decisions based on all
relevant information to maximize their utilities.
D) People are irrational.

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  • 1. What assumption expected utility theory does not make about people and firms? a) People and firms are self-interested entities B) People and firms try to maximize their desired outcomes (utility for people and profits for firms) under resource constraints. C) People can rank rationally possible outcomes and make independent decisions based on all relevant information to maximize their utilities. D) People are irrational.