Economic Agent Assumption

Economic agents are assumed to be rational decision-makers. This means they make choices based on their preferences and available information, seeking to maximize their utility (in the case of consumers) or profit (in the case of firms).

some key features:

• rationality
• self-interest
• utility and profit maximization
• information
• consistency

Exchange Ratio

Exchange ratio in economics refers to the rate at which one good or service can be exchanged for another in a market. It represents the numerical relationship between the quantities of two different goods or services that individuals are willing to trade. The exchange ratio is determined by the forces of supply and demand in a market and reflects the relative value that individuals place on the goods or services being exchanged.