It is useful to assume that there is a single representative consumer because
A) this is realistic.
B) this is a useful abstraction if we are interested in problems where distribution effects are not important.
C) this is the only model we know how to work with.
D) a model with one consumer is the same as one with many consumers.

Question

Quizplus · Accepted Answer

Assuming a single representative consumer can be a useful abstraction if we are interested in analyzing problems where distribution effects are not important. While it may not be completely realistic in all cases, it simplifies the analysis and can provide insights into general equilibrium outcomes. The other choices are either incorrect or do not fully justify the usefulness of assuming a single representative consumer.

It Is Useful to Assume That There Is a Single