Chapter 2 - Decision Making Approach

Question 1

What do economic agents have to consider in decision making?

Answer 1

Constraints, expected benefits and costs, information, perspectives, intended and unintended consequences, changes (before / after decision)

Question 2

Outline the decision-making framework.

Answer 2

1. Objective
2. Before the decision,
   - Constraints
   - Benefits
   - Costs
3. After the decision,
   - Intended consequences
   - Unintended consequences (unanticipated and not intended)