The Three Limitations on Human Rationality That Behavioural Economics Emphasizes

question 13

Multiple Choice

The three limitations on human rationality that behavioural economics emphasizes are

• A)bounded rationality,bounded utility,and bounded self-interest.
• B)bounded rationality,bounded willpower,and bounded self-interest.
• C)bounded utility,bounded willpower,and bounded self-interest.
• D)bounded rationality,bounded willpower,and bounded utility.
• E)bounded rationality,bounded surplus,and bounded utility.

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Definitions:

Unfavorable Activity Variance

This term describes a situation where actual costs exceed the standards or budgeted amounts, leading to a negative variance.

Static Planning Budget

A budget based on a fixed level of activity, without adjusting for any variations in actual performance, useful for initial planning.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, revenue, or other factors influencing budgeting.

Static Budget

A financial plan that does not change or adjust over the period, regardless of any changes in business activity levels.