2. Personality Dimensions Emotions: complex, patterned, reactions to how we think we are doing in our lifelong efforts to survive and flourish and to achieve what we wish for ourselves Emotional Intelligence: ability to manage oneself and one’s relationships in mature and constructive ways Attitude: learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object Values: involve enduring beliefs about the importance of family, work, religion, spirituality, family and work roles Perception: cognitive process that enables us to interpret and understand our surroundings Motivation: psychological processes cause the arousal, direction, and persistence of voluntary actions that are goal directed

3. Decisions are based on: – The process of drawing on, interpreting, and integrating categorical information stored in long-term memory – Retrieving a summary judgment that was already made Rational Model Nonrational models 1.Decision making is uncertain 2.Decision makers do not possess complete information 3.Difficult to make optimal decisions

4. Bounded rationality – represents the notion that decision makers are “bounded” or restricted by a variety of constraints when making decisions Satisficing – choosing a solution that meets some minimum qualifications, one that is “good enough”. Judgmental heuristics – rules of thumb or shortcuts that people use to reduce information processing demands. Decision-Making Biases

5. Intuition Decision-Making Criteria maximaxmaximinminimax minimax regretHurwiczequal likelihood

6. Economic Growth Illustrated PPC in Year 1 PPC after economic growth PPC after more growth

7. How Saving and Investment Affect Productivity Growth Low rate of investment  low productivity growth Capital spending (to replace capital stock) is low Investment also  GDP growth (see PPC curves) Country B has a higher growth rate than Country A. Is Country B China and Country A the US?