Altruism

Question 1

The first two reasons for irrational behaviour are:

Bounded _______ - limited _______ processing when making decisions

2. Bounded self-control - our limited ability to control ourselves

Answer 1

Bounded rationality - limited mental processing when making decisions

2. Bounded ______ -_______ - our limited ability to control ourselves

Question 2

What does rational decisions maximise

U______

Answer 2

Utility

Question 3

Why do we sometimes not maximise our utility

Other p_____

Answer 3

Other people

Question 4

What is altruism often caused by

F_______

Answer 4

Fairness

Question 5

Which of the following is not used to explain irrational behaviour?

Unbounded self-control

Bounded rationality

Limited self-control

Altruistic behaviour

Answer 5

Altruistic behaviour

Question 6

Which of the following explains what is meant by altruism?

Making decisions that maximise utility

Making selfish decisions

Caring about the utility of other people

Diminishing marginal utility as more units are consumed

Answer 6

Caring about the utility of other people

Question 7

Which of the following explains why economists view altruistic behaviour by a consumer as irrational?

It involves increasing the utility of other people at a cost to the consumer

It involves limited mental processing ability by the consumer

It increases the consumer’s utility but reduces the utility of other people

It refers to a consumer’s lack of self control

Answer 7

It involves increasing the utility of other people at a cost to the consumer