1.2.1 rational decision making

• What is the aim of consumers in rational economic decision making?

  To maximise utility
• Who is referred to as Homo Economicus?

  The rational consumer who calculates utility from decisions
• What do firms aim to maximise according to economic theory?

  Profit
• Why do governments aim to maximise social welfare?

  Because they are elected by the public and work for their satisfaction
• What is being questioned by behavioral economists regarding rational decision making?

  That economic agents always have the necessary information to act rationally