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SOSC 1340A, Week 4 Portfolio Assignment:

You will be summarizing/paraphrasing the

following from Textbook Chapter 11, page 167 You will aim for a summary that is no longer than ½ page, hand-written

In order to understand mainstream economics better, we can ask questions like: how are we to understand this homo economicus? Does 'he' correspond to our true nature or is 'he' an absurd caricature of real human beings? Does 'he' represent the way we ought to behave as rational economic individuals, even if we fall short of 'his' standards in our less well thought through decisions? We suggest that homo economicus is not 'the truth' about what human nature really is, but is a device necessary for making economics into a 'science'. This assumption was popular in the late nineteenth century, when many thinkers began to render what was once called political economy into the modern 'science' of economics. This change was accomplished primarily through the use of mathematical models and reasoning. For example, assuming that most human beings are rational economic beings who possess the attributes of homo economicus makes it easier to fit them into mathematical models. This is why economics textbooks seem more like the study of mathematics than anything else; most mainstream economists assume that human beings think of their advantage and self-interest in terms of quantity and price, and since price can be measured, we can then start to think about economics in mathematical terms.

These mathematical models are based on homo economicus and the economic decisions 'he' makes about buying and selling. In other words, the 'people' who inhabit the mathematical models of economic economics are primarily consumers who wish to maximize their own utility.

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