What Do We Mean by Bounded Rationality

question 39

Multiple Choice

What do we mean by bounded rationality?

• A) Consumers are inherently irrational and this limits their ability to make effective decisions.
• B) The ability for a consumer to be rational is bounded by the situation in which the consumer finds himself.
• C) Consumers are prevented from acting rationally, as they use past experiences to inform their decisions.
• D) Consumers are limited by time in decision making so consumers cannot always be rational.

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Definitions:

Ratios

Expresses the quantitative relationship between two numbers, showing how many times one value contains or is contained within the other.

Univariate Data

Data consisting of observations on only a single characteristic or attribute.

Single Variable

Pertaining to equations, functions, and data that involve only one variable and do not require the interaction or relationship with any other variables for their resolution.

Multivariate Data

Data involving two or more variables that are analyzed together to understand relationships and patterns among them.