Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 1
Transcribed Image Text:Section one-theory
A: Key concepts
1. An individual is observed throwing money into the sea. Is this behaviour consistent with the
optimisation principle?
Expert Solution
Step 1
According to the optimization principle, an entity will behave in a way that maximizes the value of a certain set of abstract functions. Different precise scientific rules can be obtained when we clarify what those functions are.
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