LS7 - Decision Making

Question 1

Rational behaviour

Answer 1

Behaviours that maximise utility

Question 2

Utility

Answer 2

Satisfaction or benefit derived from consuming a good

Question 3

Utility for firms

Answer 3

Profit

Question 4

What is required to make rational decisions

Answer 4

Time, info, ability to process info

Question 5

What prevents rational behaviour

Answer 5

Habitual behaviour
Consumer inertia (fear of unknown)
People influenced by behaviour of others
Weakness at computation (data)