Behavioral Economists Examine Choices That Consumers Make That Are Not

question 153

Essay

Behavioral economists examine choices that consumers make that are not economically rational.Economists generally assume that people are rational; that is, they weigh the benefits and costs of an action and choose an action only if the benefits outweigh the costs.Why do consumers not act rationally when the result is that they make themselves worse off?

---

Definitions:

CPU

Central Processing Unit, the primary component of a computer that performs most of the processing inside a computer.

Primary Storage

Refers to the main storage of a computer where data is temporarily stored and accessed by the processor directly, such as RAM.

Registers

High-speed storage areas in the CPU that store very small amounts of data and instructions for short periods.

The ALU

An Arithmetic Logic Unit (ALU) is a digital circuit used to perform arithmetic and logic operations in computers.