Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 19.1, Problem 9Q
To determine
The principle of rational choice and bounded rationality.
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In economics, we assume that choices are based on desired outcomes. This concept is
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Discuss Simon’s concept of “bounded rationality.”
Joab and his friends used to play a game where they put on a dog's electric fence collar and tried to stand over the electric fence line because, after careful
consideration of the costs and benefits, they decided that the benefits of watching their friends get shocked outweighed the costs of being shocked themselves.
According to the economic way of thinking, by playing this game, Joab and his friends were
O not responding to the incentives they faced.
making an irrational choice.
making a rational choice.
not fully considering the costs and benefits of their decision since this is obviously a mistake for anybody to do.
Chapter 19 Solutions
Microeconomics
Ch. 19.1 - Prob. 1QCh. 19.1 - Prob. 2QCh. 19.1 - Prob. 3QCh. 19.1 - Prob. 4QCh. 19.1 - Prob. 5QCh. 19.1 - Prob. 6QCh. 19.1 - Prob. 7QCh. 19.1 - Prob. 8QCh. 19.1 - Prob. 9QCh. 19.1 - Prob. 10Q
Ch. 19.A - Prob. 1QECh. 19.A - Prob. 2QECh. 19.A - Prob. 3QECh. 19.A - Prob. 4QECh. 19 - Prob. 1QECh. 19 - Prob. 2QECh. 19 - Prob. 3QECh. 19 - Prob. 4QECh. 19 - Prob. 5QECh. 19 - Prob. 6QECh. 19 - Prob. 7QECh. 19 - Prob. 8QECh. 19 - Prob. 9QECh. 19 - Prob. 10QECh. 19 - Prob. 11QECh. 19 - Prob. 12QECh. 19 - Prob. 13QECh. 19 - Prob. 14QECh. 19 - Prob. 15QECh. 19 - Prob. 16QECh. 19 - Prob. 1QAPCh. 19 - Prob. 2QAPCh. 19 - Prob. 3QAPCh. 19 - Prob. 4QAPCh. 19 - Prob. 5QAPCh. 19 - Prob. 1IPCh. 19 - Prob. 2IPCh. 19 - Prob. 3IPCh. 19 - Prob. 4IPCh. 19 - Prob. 5IPCh. 19 - Prob. 6IPCh. 19 - Prob. 7IPCh. 19 - Prob. 8IPCh. 19 - Prob. 9IPCh. 19 - Prob. 10IP
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- Correct answer please.arrow_forwardWatch on YouTube Questions: A) Detail and describe a decision that you made in the past that contradicts the assumption of rationality in standard economic theory? How and why was it irrational according to standard economic theory?arrow_forwardHerbert Simon, the Novel Prize-winning economist, described the rational model of decision-making in what way?arrow_forward
- What good is economic theory if it cannot predict the behavior of a specific individual?arrow_forwardThe wants with which economics is concerned include only those wants which can be satisfied by goods and services. True or False?arrow_forwardsocial preferences are not really preferences, and unselfish behavior is really motivated by the desire to follow rules and conventions with respect to what is fair. Is this interpretation correct?arrow_forward
- All points on the utility possibilities frontier satisfy the Pareto condition. TRUE OR FALSEarrow_forwardHow is the ordinal utility concept different from the cardinal utility concept?arrow_forwardJohn has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is true? John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. John did not use the economic way of thinking because his decision on how to allocate his time did not involve money. John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off, John's decision does not involve his pursuit of self-interest.arrow_forward
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