The theory of consumer demand
A)can be used to explain how an individual allocates time between two competing uses
B)is valid only for choices among various physical goods
C)is valid only for goods and services purchased for cash
D)is valid only if consumers are perfectly rational
E)can explain the demand for normal goods,but not the demand for inferior goods

Question

Quizplus · Accepted Answer

The theory of consumer demand can be used to explain how an individual allocates time between two competing uses. This is known as the theory of time allocation or time use. It is an extension of the theory of consumer behavior that explains how individuals allocate their income or budget between goods and services. Therefore, option A is the best choice. The other options are not correct because the theory of consumer demand is not limited to physical goods, goods and services purchased for cash, or perfect rationality, and it can explain the demand for both normal and inferior goods.

The Theory of Consumer Demand