Question
A decision is said to be rational when it is based on
_______.Solution
Rational decision-making is a systematic process of evaluating alternatives and choosing the best possible option. It involves: • Identifying the problem, • Listing possible alternatives, • Evaluating each option, and • Selecting the most effective solution. Unlike decisions driven by gut feeling, bias, or emotions, rational decision-making is grounded in logic, analysis, and objectivity. It ensures that choices are consistent, transparent, and well-justified.
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I. Substitution effectÂ
II. Income effectÂ
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