2.4 - Behaviour Economics

According to classical economic theory, what is the assumption regarding consumer rationality?

• Consumers have perfect information

• Consumers make irrational decisions

• Consumers always make rational decisions

• Consumers aim to maximize their happiness

Which statement best describes the concept of 'bounded rationality' in consumer behavior?

• • Consumers having perfect information

• • Consumers maximizing their utility without constraints

• • Consumers following a rule of thumb due to limited cognitive resources

• • Consumers always acting in their self-interest

What is the term used to describe the context in which something is seen and perceived, creating a bias in decision-making?

• Framing

• Availability

• Bounded rationality

• Anchoring

What is the main objective of profit maximization according to classical and neo-classical theory?

• Corporate social responsibility

• Market share

• Growth

• Profit maximization

Which of the following is an example of a "default choice"?

• • Offering healthier menu options in schools

• • Automatically enrolling individuals in organ donation unless they opt-out

• • Providing subsidies for electric vehicle purchases

• • When Alice goes to renew her driver's license, she is presented with the question about organ donation. She must select "Yes" or "No" before she can proceed with her renewal

What is the approach where firms attempt to produce responsibly towards the community and environment?

• Market share

• Corporate social responsibility

• Profit maximization

• Growth

Which of the following is an example of "anchoring" in consumer decision-making?

• • Comparing all available options before making a choice

• • Being influenced by the first piece of information encountered

• • Choosing products based on their environmental impact

• • Using a general guideline instead of detailed analysis

What is the concept where entrepreneurs aim to increase their revenues rather than maximize profits?

• Satisficing

• Corporate social responsibility

• Growth

• Market share

What does "bounded selfishness" imply?

• • Individuals lack information to make rational decisions

• • Individuals have complete control over their consumption habits

• • Individuals always act in their own self-interest

• • Individuals sometimes consider the welfare of others in their decisions

Which of the following is an example of a "restricted choice"?

• • Offering healthier menu options in schools

• • Automatically enrolling individuals in organ donation unless they opt-out

• • Providing subsidies for electric vehicle purchases

• • When Alice goes to renew her driver's license, she is presented with the question about organ donation. She must select "Yes" or "No" before she can proceed with her renewal