Final answer:
The rational model of decision making suggests that managers are entirely objective and have complete information, leading to logical decisions. However, real-world decision-making often involves heuristics and can appear irrational, as people may not consistently act in their own best interest or use all available information.
option e is the correct
Step-by-step explanation:
The rational model of decision making assumes that managers are completely objective and possess all information for their decisions. In this model, decisions demonstrate excellent logic. Traditional economic models are founded on the assumption of rationality, implying that individuals, including managers, utilize all available information to make consistent and informed decisions that align with their best interest.
Human decision making, however, often deviates from this rationality. People sometimes make choices that appear irrational and contrary to their self-interest, demonstrating inconsistencies from day to day. For instance, they may overlook opportunities to save money or time without any beneficial rationale behind their actions.
Economic professors often introduce the concept of irrational behavior in economics classes to highlight the contrast with the rational model. In reality, many decisions are made using heuristics, which are simpler, practical rules that are substituted for more complex decision-making processes. These heuristics allow for quicker decision-making but do not always follow the rational model's expectations for logical and well-informed choices.