The Adaptive Rationality Standard

question 94

Multiple Choice

The adaptive rationality standard:

• A)assumes that people's goals are themselves a choice variable and that people's choices about which goals to pursue are made efficiently.
• B)takes people's goals as given and assumes that people are efficient at pursuing whatever goals they happen to hold at the moment of action.
• C)assumes that people act in their own self-interest because cooperating with others is irrational.
• D)argues that people are only able behave rationally if they are aware of how their actions affect others.

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Definitions:

Marginal Utility

The increased enjoyment or advantage derived by a consumer from the consumption of an extra unit of a good or service.

Lemonade

A beverage typically made from lemon juice, water, and sugar.

Marginal Utility

The additional satisfaction gained from consuming one more unit of a good or service.

Market Basket

A set of goods and services used to represent what is consumed by a typical consumer for the purpose of measuring inflation or cost of living.