Consumer choice theory generally concludes that is based on the hypothesis that each consumer wants to
A)maximize her total utility.
B)maximize her marginal utility.
C)minimize the rate at which her marginal utility diminishes.
D)minimize the percentage of her consumption diverted to inferior goods.

Question

Quizplus · Accepted Answer

Consumer choice theory assumes that each consumer aims to maximize her total utility, which can be achieved by consuming goods and services that provide the highest level of satisfaction relative to their costs. This concept is based on the assumption that individuals are rational and make decisions based on their preferences and constraints. Therefore, the goal of each consumer is to allocate her limited income in a way that maximizes overall satisfaction or happiness.

Consumer Choice Theory Generally Concludes That Is Based on the Hypothesis