Describe the Rational Choice Paradigm of Decision Making

question 20

Essay

Describe the rational choice paradigm of decision making.

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Definitions:

Income Redistribution

The reallocation of income from certain individuals to others by means of a social mechanism such as taxation, charity, welfare, public services, land reforms, or monetary policies.

Utilitarian Justice

The idea that “a dollar in the hand of a rich person is worth less than a dollar in the hand of a poor person.” If the marginal utility of income declines with income, transferring income from the rich to the poor will increase total utility.

Human Capital

The economic value of a worker's experience and skills, including education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.

Utilitarian Justice

A principle in ethics and economics that a decision should be made so as to maximize overall happiness and reduce suffering among all people affected by the decision.