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

Utility function represents the preferences of the representative consumer over consumption and leisure. It assigns a numerical value to each combination of consumption and leisure, reflecting the satisfaction or utility that the consumer derives from that combination. By maximizing the utility function subject to the budget constraint, we can determine the optimal consumption and leisure choices of the representative consumer. The other options listed do not accurately represent consumer preferences in this context.

The Preferences of the Representative Consumer Over Consumption and Leisure