Multiple Choice
Which of the following statements is NOT consistent with the efficient market hypothesis?
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0. Basic Principles of Economics
Positive and Normative Analysis
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Which of the following is one of the assumptions of the rational decision-making process?
A
Individuals have complete information about all available choices.
B
Individuals always act based on emotional impulses.
C
Decisions are made randomly without considering outcomes.
D
Individuals ignore the costs and benefits of their actions.
Verified step by step guidance1
Understand that the rational decision-making process in microeconomics assumes that individuals make choices to maximize their utility or benefit.
Recognize that one key assumption is that individuals have complete information about all available choices, which allows them to compare options effectively.
Note that this assumption excludes decisions based purely on emotional impulses, randomness, or ignoring costs and benefits, as these contradict rational behavior.
Recall that rational decision-making involves weighing the costs and benefits of each option before making a choice.
Therefore, identify the assumption that individuals have complete information about all available choices as fundamental to the rational decision-making process.
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