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Economics

Quizzes & Activities

Rational behaviour (Quizlet activity)

Level:
AS, A Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Test your understanding of rational behaviour with this ten term quizlet revision activity

Key terms to revise

  • Adverse selection: When those most likely to buy insurance are also those most likely to use it
  • Asymmetric information: Imbalance in information between buyer and seller
  • Bounded rationality: When consumers have limited attention, knowledge and ability to understand couple decisions
  • Information gaps: Consumers have insufficient knowledge to make an optimal decision
  • Irrational behaviour: A decision that goes against or counter to logic
  • Marginal private cost: Internal cost to the consumer of purchasing another unit
  • Marginal utility: Change in total utility from consuming the next unit
  • Maximum utility: When marginal utility is zero
  • Moral hazard: When consumers take greater risks because they know they are insured against consequences of actions
  • Rationality: Using all information to make optimal choices

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