Utility analysis is the analysis of
A) how consumers decide how to earn more money.
B) the formation of tastes and preferences.
C) the psychology of decision making.
D) consumer decision making based on utility maximization.

Question

Quizplus · Accepted Answer

Utility analysis is concerned with understanding and predicting consumer behavior based on the principle that consumers seek to maximize their utility (satisfaction) from the goods and services they consume. It is focused on the study of consumer preferences, choice, and demand based on the notion that consumers are rational decision-makers who are motivated by self-interest and seek to maximize their well-being. Therefore, option D, which refers to consumer decision making based on utility maximization, is the correct choice.

Utility Analysis Is the Analysis of