Neuroeconomic Observations Show That Rational Utility Maximizing Decisions Generate Activity

question 45

Multiple Choice

Neuroeconomic observations show that rational utility maximizing decisions generate activity in the part of a brain called ________, while irrational decisions driven by fear and anxiety activate ________.

• A) prefrontal cortex; hippocampus
• B) hippocampus; prefrontal cortex
• C) dopamine; prefrontal cortex
• D) hippocampus; dopamine

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Definitions:

Utility Maximizing

The economic principle that consumers will choose a combination of goods and services that maximize their overall satisfaction.

Indifference Curves

graphical representations in microeconomics illustrating combinations of goods that provide an individual with the same level of satisfaction.

Budget Constraint

A economic term that represents the limitations on the consumption choices of individuals based on their income and the prices of goods and services.

Tomatoes and Nectarines

Examples of perishable goods often used in discussions about agriculture and consumer choice.