Rational decision making
What Rational decision making means in Economics A-Level, as defined for AQA.
Definitions of Rational decision making
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Reference: AQA
Making decisions using the complete information needed, which economic agents lack when imperfect information occurs.
Making choices to maximise utility or profit, which requires agents to possess perfect information.
Consumers weigh the marginal benefit (utility) of a good against its opportunity cost or price.
Topics that use Rational decision making
- Consumer behaviour (AQA A-Level)
- Imperfect information (AQA A-Level)
- Market imperfections (AQA A-Level)
Related terms
- Rationality
- Utility maximisation
- Asymmetric information
- Decision making
- Economic incentives
- Hypothesis of diminishing marginal utility
- Information gaps
- Labour markets
Using Rational decision making in the exam
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