Directions: The following are the memes found on

Facebook App. You will answer the questions in

memes honestly, then justify your answer.
Please click to edit text
1.How did you find the activity?
2.What did you consider in choosing
answer?
 RATIONAL CHOICE
THEORY

• Rational choice theory also called as rational action theory or

choice theory, states that individuals use rational calculations to
make rational choices and achieve outcomes that are aligned with
their non personal objectives.
• It is used to model human decision making , especially in the
context of Microeconomics, where it helps Economists better
understand the behavior of a society in terms of individual
actions as explained through rationality, in which choices are
consistent because they are made according to one's personal
preferences.
• In this theory, cost-benefit analysis is
always performed in every given situation
and is considered an instinctual response
to every human.
• Sebastian has two classmates whom he wants to be friends with:
Ethan a social outcast but has the newest action game, and
Alyster, the most popular in the class but does not like to play action
games. Sebastian's first level of cost-benefit analysis is choosing
between having the chance to play the newest game or not. His
second level of cost-benefit analysis is choosing whether he would
like to be associated with social outcast or with the most popular
student in class.
• The rational choice for Sebastian would then be dependent
on which is more important to him-to play the game or to be
associated with the popular crowd. This example provides
the basic principle of rational choice theory wherein
preferences play an important role in decision-making,
while the individual rationalizes the burdens and benefits of
his/her individual choices.
Assumptions of the
Rational Choice Theory
• It is the individuals who ultimately take actions.
• Individuals, as actors in the society and
everywhere they go, behave and act always as
rational beings, self-calculating, self-interested
and self-maximizing.
• Individuals choosen their optimally, given their
individual preferences as well as the opportunities or
constrainsts with which they are faced with.
• Abell (2000) defines optimality as taking place when
no other course of social action the individual has
chosen.
• This does not mean that the actor adopts is the best in
terms of some objective, and outside judgement.
• Abell argues that structures and norms that dictate a
single course of action are merely special cases of
rational choice theory. In other words, the range of
choices in other circumstances differ from choices in a
strong structural circumstance, where there may be
only one choice.
• This assuption states that the actions of the individual are
concerned entirely with his or her welfare.
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• All individuals, according to this assumption, act
in ways that would benefit them more; every
individual is most likely to undertake courses of
actions that they perceive to be the best possible
option and one that would immensely be to their
own advantage.

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 Important
Theorist

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 William Stanley Jevons

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 Gary Becker

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 Criticisms and
Limitations

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• Rational choice theory is heavily criticized for its
neglect of ethical and moral standards.
• The main philosophy of rational choice theory is
the acquisition of personal interest, power and
wealth.

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Cite an instance in your daily life wherein you
applied rationality in making a final choice or
decision. Elaborate your answer by giving not only
your choice and the option/s available but also the
reason for your choice.

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• A girl/boy went to the mall to buy school shoes. Upon entering
the shoes section, a pair of ragged shoes caught her/his
attention. The girl/boy was having a hard time choosing
between school shoes or ragged shoes. If you are in the same
situation, what will you choose?

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Direction: Answer the following statement with TRUE or FALSE about the
concept of the lesson discussed in class.

1. The key elements of all rational choice explanations are individual

preferences, beliefs, and constraints.
2. Preferences play an insignificant role in decision making.
3. Rational choice theory is also called as Rational Theory or Choice
Theory.
4. Rational Choice Theory states that individuals use irrational calculations
to make rational choices and achieve outcomes that are aligned with
their own personal objectives.
5. Rational choice theory is the perspective that people act as they do,
since they think that acting on their chosen human activity has much
profit than costs.
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On your journal/activity notebook, answer the following questions:

• Have you been in a situation where you have finite access of

transportation, time, money, and limited supply of necessities like food,
water, medicine, alcohol and etc., especially now in the pandemic
crisis?
• How do you react when the government imposed the lockdown policy in
your area, and you have a limited supply of your basic needs, and the
distribution of reliefs goods/money is not fair?
• How is rational theory applied in this situation?

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