Utility maximization assumes the following except:
A) Individuals are only concerned with normal goods.
B) Individuals have a set of stable preferences.
C) Individuals know how their choice will result in a particular outcome.
D) Individuals have the ability to make the optimal choices.

Question

Quizplus · Accepted Answer

Utility maximization does not assume that individuals are only concerned with normal goods. It allows for preferences across a wide range of goods, including inferior goods, luxury goods, and necessities. The other options (B, C, D) are indeed assumptions underlying the concept of utility maximization.

Utility Maximization Assumes the Following Except