ARE 112 Midterm 1 Questions and Answers 100% Correct!

bounded rationality -ANSWER- A set of BOUNDARIES or CONSTRAINTS that tend to complicate the rational decision-making process transaction costs -ANSWER- the expenses of negotiating and executing a deal (the cost of completing a sale/purchase) cost of uncertainty -ANSWER- chance that price of an asset will change; unstable stocks or bonds incomplete contracts -ANSWER- When a consumer or seller is not able to maximize the benefits of a transaction because they are not aware of all the factors or not able to understand all the factor surrounding the transaction mother city -ANSWER- Caral- Built up other civilizations through trading, etc.; cooperative model v competitive model. Satisficing -ANSWER- choosing a "good enough" alternative; compare w/ optimizing Optimizing -ANSWER- achieving the best possible balance among several goals Genghis Khan -ANSWER- _________'s management style: keep only the best people; promote by ability not rank; mission-driven (as opposed to personality-driven)