Rational decision making
What Rational decision making means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Rational decision making
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Reference: Pearson Edexcel
Making utility-maximising decisions, which economic agents cannot do when they lack the complete information required.
Making decisions at the margin by weighing the marginal utility of an additional unit against its opportunity cost.
Deciding by evaluating potential trade-offs, which leads directly to the concept of opportunity cost.
Making choices across all sectors with an understanding of the trade-offs involved.
Topics that use Rational decision making
- Demand (Pearson Edexcel A-Level)
- Market failure in society (Pearson Edexcel A-Level)
- The economic problem (Pearson Edexcel A-Level)
Related terms
- Complementary goods
- Demerit goods
- Economic agents
- Factors of production
- Information failure
- Information gaps
- Market failure
- Non-price determinants
Using Rational decision making in the exam
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