Rational choice is the option that gives
the most utility. Utility meaning what gives the most happiness.
Example 1
Example 1
Option A: Watching a movie gives you
totally 5 units of utility.
Option B: Going to a concert gives you totally 10 units of utility.
Since 10 is greater than 5, you will choose the second option (Option B).
Example 2
Option B: Going to a concert gives you totally 10 units of utility.
Since 10 is greater than 5, you will choose the second option (Option B).
Example 2
Option A: You buy a motorcycle A for 30,000. It looks very good, but requires 2
hours of maintenance per hour of riding time.
Option B: You buy a motorcycle B for 10,000. It doesn’t look very good, but runs good, doesn't require constant maintenance but is made mostly of plastic.
Option B: You buy a motorcycle B for 10,000. It doesn’t look very good, but runs good, doesn't require constant maintenance but is made mostly of plastic.
Any choice is rational, but it depends
on utility criteria.
Footnote: Some materials is from http://answers.yahoo.com
Aghanemat Aghayev
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