1.1.2 economic assumptions Flashcards
1
Q
Rational decision making
A
Method for systematically selecting among possible choices based on reasons and facts
2
Q
Irrational decision making
A
Decision that goes against logic: choices based on feelings, trends, and interest
3
Q
Consumers aim to…
A
Maximise benefit
Choosing goods with:
- lowest price
- highest quality
- best value
4
Q
Consumers may not maximize benefit because…
A
- Hard to calculate total benefit
- Habits of buying (certain products/brands)
- Loyalty
- Influence of others (trends)
- Lack access to all information
5
Q
Businesses aim to maximize…
A
Profit
- Making goods for lowest price with minimum amount of resources
6
Q
Businesses may not maximize profit because…
A
- Have other objectives (charity, raising awareness)
- Customer care/loyalty
- Lack information to be a successful business (locations, products, opinions)
