A consumer who adheres to bounded rationality is
A) a fully rational consumer who behaves like an all-knowing supercomputer when making cost-benefit calculations.
B) a completely irrational consumer who is unable to use logic to compare costs and benefits.
C) neither capable of performing the problem-solving that traditional economic theory assumes nor is inclined to do so.
D) rational only in situations that involve market prices.
E) never rational in situations that involve market prices.

Question

Quizplus · Accepted Answer

Bounded rationality refers to the idea that individuals have limited cognitive abilities and are only capable of making decisions within certain limitations. Individuals with bounded rationality are neither fully rational nor completely irrational, but rather make decisions based on the information and choices available to them at the time. Thus, choice C is the best answer as it reflects this limitation on problem-solving capabilities that bounded rationality entails.

A Consumer Who Adheres to Bounded Rationality Is