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According to utility theory, non-transitive decisions are irrational
a) True
b) False

User Merelda
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Final answer:

According to utility theory, non-transitive decisions are considered irrational because they violate the necessary consistency of preferences that are complete and transitive.

Step-by-step explanation:

The statement that non-transitive decisions are irrational according to utility theory is true. In utility theory, preferences must be complete and transitive for decisions to be considered rational. A transitive preference means that if an individual prefers option A over B and B over C, then that individual must also prefer A over C. In cases where preferences are non-transitive, they violate the consistency required by the rational decision-making model of utility theory and are therefore deemed irrational.

User Tim Barrass
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