1.2.1/1.2.10 Rational decision making/Alternative views Flashcards
1
Q
economic welfare
A
The level of wellbeing/prosperity/living standards of an individual/group
2
Q
Rational theory
A
Assume most economic agents will act in a rational way most of the time
3
Q
the assumptions of rational choice
A
computational skills
perfect market information
sufficient time to make decisions
take decisions free from behaviour of others
4
Q
what are rational decisions
A
economic agents aiming to maximise net benefits
5
Q
utility
A
the satisfaction/benefit derived from consuming a good/set of goods
6
Q
factors preventing rational decision making
A
social awareness
social pressure
emotional arousal
limited decision making time
