Bounded Rationality

Question 1

What assumptions do traditional economic models make about consumers?

Answer 1

They will behave rationally and maximise their utility

Question 2

A bat and a ball cost £1.10 together. The bat costs £ 1 more than the ball. How much does the ball cost?

Answer 2

0.05

Question 3

When does abounded rationality become worse

T______

Pr_____

Answer 3

Times situations

Pressured situations

Question 4

Which of the following describes what is meant by bounded rationality?

Unlimited brain power

Decreasing satisfaction from each extra unit

Limited mental processing abilities

Behaving perfectly rationally

Answer 4

Limited mental processing abilities