- a rational individual maximises their pleasure to achieve happiness
- maximisation of pleasure is assumed to be achieved through consumption of goods.
- a util is assumed to be in a constant ratio to units of consumption.
- the util ratio is assumed to apply to all goods.
- It is assumed that we would always want more of a good, but that the amount satisfaction we get from each new unit of consumption produces less utility.
- all consumers spend all their income.
- price changes do not affect income.
15 Aug 2012
Debunking Economics III: Assumptions
I wanted to present as a list all of the assumptions which I have noted in economics. I'll update as I go.