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The Rational Benchmark vs. Reality

The Rational Benchmark vs. Reality

Traditional economics assumes that consumers are fully rational utility maximizers. This means they perfectly calculate the optimal bundle of goods that maximizes their total utility, UUU, subject to a budget constraint:

1.2.4 Behavioural economics and economic policy Lesson

  1. A Level
  2. /Economics
  3. /1.2.4 Behavioural economics and economic policy