a) Rational decision making

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6 Terms

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How are economic agents assumed to make decisions?

Rationally

2
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What does making a rational decision mean?

Making choices depending on the net benefits of each option

3
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How do consumers make rational decisions?

By attempting to maximise the utility from their choices

4
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What is utility?

The satisfaction gained from a good or service

5
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How do firms make rational decisions?

By attempting to maximise the profit from their choices

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How do governments make rational decisions?

By attempting to serve the people to maximise their welfare