Question

Bounded rationality means that:

1. 1. people have a limited capacity to anticipate, solve complex problems, or enumerate all options.
   2. individuals violate the assumption of completeness in ranking preferences.
   3. individuals can become satiated in their consumption of a particular product.
   4. individuals make correct decisions regarding monetary gains but not losses.

Answer 1

Bounded rationality refers to the fact that rationality of individual is limited by the limited information about the choice and time to make decision and state of mind. Therefore, the right answer is

• A. People have a limited capacity to anticipate, solve complex problems, or anumerate all options.