Th1.2: Rational Decision Making Flashcards
1
Q
What do consumers aim to maximise?
A
utility
2
Q
What is utility?
A
the satisfaction gained from consuming a product
3
Q
What do firms aim to maximise?
A
profit
4
Q
What does the economic theory assume about firms?
A
firms are run for their owners and shareholders and so aim to maximise profit in order to keep the shareholders happy
5
Q
What do governments aim to maximise?
A
social welfare
