When Consumers or Businessmen Stop Collecting Information to Make Decisions

question 3

Multiple Choice

When consumers or businessmen stop collecting information to make decisions at the point where marginal cost of data collection equals the marginal utility of the data, economists would call the decisions based on existing data

• A)perfect decisions.
• B)optimally imperfect decisions.
• C)joint decisions.
• D)rent seeking.

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Definitions:

Utility-Maximizing Combination

A selection of goods and/or services that provides the highest level of satisfaction or utility to a consumer, given their budget constraints.

Total Utility

The total satisfaction or benefit received by consuming a particular quantity of a good or service.

Marginal-Utility Schedules

Charts or tables showing the relationship between the quantity of a good consumed and the marginal utility or satisfaction received from consuming each additional unit.

Maximum Utility

The highest level of satisfaction or benefit that a consumer can obtain from consuming goods and services, given their income and prices of goods.