Briefly discuss each of the following economic ideas: People are rational, people respond to economic incentives, and optimal decisions are made at the margin. What is scarcity? Why is scarcity...

Briefly discuss each of the following economic ideas: People are rational, people respond to economic incentives, and optimal decisions are made at the margin. What is scarcity? Why is scarcity central to the study of economics? Comment on the assumption common to most economic models that all individuals are rational and make optimal decisions in response to economic incentives.