In macroeconomic analysis,the representative consumer
A) denotes the consumer with the average amount of income.
B) plays the role of a stand-in for all consumers in the economy.
C) is the consumer who bargains with firms for all workers in the economy.
D) is always a misleading fiction.
E) is the consumer with an average standard of living.

Question

Quizplus · Accepted Answer

The representative consumer is used as a tool to simplify the analysis of the aggregate behavior of all consumers in the economy. It is a hypothetical consumer that represents the average consumption patterns, preferences, and income of all consumers in the economy. It allows economists to make broader predictions about the economy as a whole, without having to consider the behavior of each individual consumer.

In Macroeconomic Analysis,the Representative Consumer