The theory of consumer choice 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

The theory of consumer choice assumes that consumers aim to maximize total utility, which is the overall satisfaction or benefit they derive from consuming goods and services. This means that consumers will try to allocate their incomes in a way that maximizes their total utility, subject to their budget constraint.

The Theory of Consumer Choice Is Based on the Hypothesis