Economists usually assume that households
A)make consistent decisions, maximize utility, and are the principal owners of the factors of production.
B)make consistent decisions, maximize savings, and are the principal users of the factors of production.
C)do not make consistent decisions, maximize satisfaction, and are the principal owners of the factors of production.
D)make consistent decisions, maximize profits, and are the principal users of the factors of production.
E)do not make consistent decisions, maximize profits, and are the principal users of the factors of production.

Question

Quizplus · Accepted Answer

Economists usually assume that households make consistent decisions, maximize utility, and are the principal owners of the factors of production. This assumption is based on the idea that households aim to achieve the best possible outcome from the use of their resources, which includes their labor, capital, and other factors of production. By maximizing their utility, households aim to achieve the best possible outcome in terms of their satisfaction, and this is reflected in their consumption and savings decisions. Households are also considered to be the principal owners of the factors of production because they supply labor, capital, and other inputs to firms as a means of generating income.

Economists Usually Assume That Households