Summary IB Economics HL Rational Choice Theory and Behavioural Economics
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Course
IB Economics HL
Institution
Other
Book
Economics for the IB Diploma with CD-ROM
Handwritten and completely explained notes for IBDP ECONOMICS HL 2.6 Rational Choice Theory and Behavioural Economics Theory - including assumptions like consumer rationality and others, limitations of these assumptions, theories of consumer choice using cognitive bias, examples of behavioural eco...
ECS1601 Assessment 7 - Alternative 2024 – DUE 2 November 2024 ;100 % TRUSTED workings, Expert Solved, Explanations and Solutions.
ECS1601 Assignment 7 (ALTERNATIVE COMPLETE ANSWERS) 2024 - DUE 2 November 2024
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Fraternal Xanana
decision 00th
all individuals assumed act best self
are to in their interest
trying to maximise
-
,
the
satisfaction they expect to reueve
from their economic decisions
Assumed that
spend their purchases to maximise their satisfaction
consumers
money on
Assumed that
firms / producers try to maximise their profits from business
Human behaviour reflects Individuals look for /
'
'
rational self -
interest :
pursue opportunities to increase
their utility & maximise their satisfaction from consuming a
good / service
fraternal EuenfnvmehhKhare
Assumptions
CONSUMER RATIONALITY consumers make purchasing decisions
according to their tastes &
-
preferences which
satisfy 3
assumptions
-
:
→ the
completeness assumption
-
consumer is able to rank goods according to their
preferences
( A over B
,
or B over A ,
or
indifference)
→
the trans tutty
assumption
-
preferences among alternative choices are consistent
(
if A over B and B over C the must
prefer A c)
-
over
→
the non satiation assumption consumer always prefers more
of a
good to less If there 2
are
groups
- - .
of a
good one
group ✗ contains of good than
group Y consumer will choose ✗
-
a
-
more
PERFECT INFORMATION -
assumed that consumers have the perfect information about all their
alternatives & there's If A B- assumed that possible
no
uncertainty . a consumer chooses over
they possess all
information about A and B
e
based
UTILITY MAXIM IS A -110N on
assumptions of rationality & perfect information
-
↳
satisfaction derive from
consumers
consuming something
consumers maximise their
utility -
make it as
large as
possible by buying the combination of goods / services
that result in the
greatest amount of utility for a given amt of money spent
.
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