Bounded rationality suggests that
A) individuals might make "incorrect" decisions because they are unable to consider all possible options.
B) individuals would rather have less choice to more choice.
C) rational decisions can only be made when choices are restricted.
D) individuals are happier when their choices are restricted or "bounded."
A
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Refer to Figure 14.1. Other things equal, an increase in the inflation rate is best represented as a movement from
A) point A to point B. B) point C to point A. C) point C to point B. D) point B to point C.
People who are unemployed because of job search are best classified as
a. cyclically unemployed. b. structurally unemployed. c. frictionally unemployed. d. discouraged workers.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:
A. intermediate goods. B. the underground economy. C. public transfer payments to households. D. the consumption of fixed capital.