ECONOMICS

Detailed explanation-1: -rational-Refers to choices that are consistent and value-maximizing within specified constraints. behave in order to maximize some outcome. bounded rationality-Limitations on a person’s ability to interpret, process, and act on information.

Detailed explanation-2: -The rational model of decision-making uses logical steps to select the best possible solution. It involves analyzing multiple alternatives and using credible data or facts to choose among options.

Detailed explanation-3: -The steps involved in the rational decision-making model are: defining the problem, identifying the decision criteria, allocating weight to criteria, developing alternative solutions, evaluating alternatives, choosing a solution, and implementing it.

Detailed explanation-4: -The four different decision-making models-rational, bounded rationality, intuitive, and creative-vary in terms of how experienced or motivated a decision maker is to make a choice. Choosing the right approach will make you more effective at work and improve your ability to carry out all the P-O-L-C functions.

Detailed explanation-5: -Rational choice theory is based on the assumption of involvement from rational actors. Rational actors are the individuals in an economy who make rational choices based on calculations and the information that is available to them. Rational actors form the basis of rational choice theory.