The preferences of the representative consumer over consumption and leisure are represented by use of a
A) production function.
B) utility function.
C) benefit function.
D) preference function.
E) dynamic function.

Question

Quizplus · Accepted Answer

The preferences of the representative consumer are represented by a utility function, which is used to measure the satisfaction or well-being the consumer derives from consuming goods and services and leisure time. The utility function can be used to analyze how changes in income, prices and other economic factors affect the consumer’s preferences, and can provide guidance for decision-making by individuals and policymakers.

The Preferences of the Representative Consumer Over Consumption and Leisure