optimization: doing the best you can Flashcards
1
Q
optimization used to predict…
A
most of the choices that people, households, businesses, and government make
assume rationality
2
Q
factors that can make it difficult to make choices
A
limited info
sorting through info can be complicated
inexperienced in dealing with a given situation
3
Q
optimization in levels
A
net benefit = total benefit (what you are willing to pay) - total cost
choose the option with the highest net benefit
