Explain Why Some Amount of Ignorance Can Be Rational

question 6

Essay

Explain why some amount of ignorance can be rational.

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Definitions:

Other-Things-Constant Assumption

An assumption in economics that all other variables remain unchanged or constant except those under immediate consideration.

Rational

A decision-making process that is based on making choices that result in the optimal level of benefit or utility for an individual.

Expected Additional Benefit

The anticipated extra advantage or income gained from making a particular business decision or investment.

Expected Additional Cost

The anticipated expenses that are not initially accounted for, occurring as a consequence of a new action or decision.