According to the Adaptive Rationality Standard, One Reason People Might

question 37

Multiple Choice

According to the adaptive rationality standard, one reason people might rationally choose to have preferences that are not narrowly self-interested is that:

• A)even rational people sometimes make irrational choices.
• B)doing so could help them solve commitment problems.
• C)they do not know how to act in their own self-interest.
• D)they have no other choice.

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Definitions:

Output Units

The quantity of goods or services produced by a company or an economy.

Allocative Inefficiency

Occurs when resources in an economy are not allocated optimally, leading to outcomes where it is possible to improve someone's well-being without worsening others'.

Profit-Maximizing

A strategy or process employed by businesses to determine the price and output level that generates the most profit.

Monopoly

A market structure characterized by (1) a single seller of a well-defined product for which there are no good substitutes and (2) high barriers to the entry of any other firms into the market for that product.