Economists assume that, within a given budget, consumers will
A)maximize average utility
B)minimize average utility
C)maximize total utility
D)face diminishing total utility after consuming the first unit of a good
E)continue to consume a good until its utility is negative

Question

Quizplus · Accepted Answer

The assumption that consumers will maximize total utility is a fundamental premise of consumer behavior in economics. This assumption is based on the idea that consumers will make rational choices to allocate their budgets towards goods and services that provide the greatest overall satisfaction or utility. This is done by weighing the benefits and costs of each purchase, and selecting the combination of goods and services that maximizes their total level of satisfaction. Therefore, option C is the best choice, as it aligns with this fundamental principle of consumer behavior.

Economists Assume That, Within a Given Budget, Consumers Will