Individual Economic Decision Making

Question 1

Law of demand

Answer 1

Demand more of something when the price is lower

Question 2

Exceptions to law of demand

Answer 2

Change in fashion
Inferior goods
Snob goods
Status goods

Question 3

Utility

Answer 3

the satisfaction or economic welfare an individual gains from consuming a good or service.

Question 4

Total utility

Answer 4

The point where satisfaction is highest

Question 5

Marginal utility

Answer 5

The satisfaction for every point

Question 6

Rule of thumb

Answer 6

An educated guess from past experiences

Question 7

Heuristics

Answer 7

A rushed decision but not always the best option

Question 8

Bounded rationality

Answer 8

We don’t have infinitely rational, we won’t always be as smart as possible

Question 9

Gazambing

Answer 9

Going up for demand, like bidding

Question 10

Anchoring

Answer 10

Setting a price based on the first one you see

Question 11

Loss aversi9n

Answer 11

Being very careful about losing money

Question 12

Herd behavioural

Answer 12

We are herd animals. Being affected by otheres

Question 13

Altruism

Answer 13

Give without expecting anything back

Question 14

Priming

Answer 14

Influencing you without you’re realising
Gum right by the till

Question 15

Framing

Answer 15

Changing a question to make it seem better
20% fat or 80% fat free

Question 16

Satisficing

Answer 16

Just enough to satisfy you