Traditional economic theory assumes that consumers act as rational utility-maximisers who possess perfect information, but behavioural economists argue that cognitive biases lead to bounded rationality.
Using examples to illustrate your answer, explain how framing and status quo bias can influence an individual's decisions when choosing how to allocate their household budget or select financial products (such as pensions or insurance).
45 exam-style questions on AQA A Level Economics 1.2 Individual economic decision making (A-level only), covering 1.2.1 Consumer behaviour, 1.2.2 Imperfect information, 1.2.3 Aspects of behavioural economic theory, and 1.2.4 Behavioural economics and economic policy. Each one has a worked solution and a mark scheme showing where the marks go.