The standard economic model of consumer choice assumes that people are ________.
A) risk averse
B) risk loving
C) risk neutral
D) fairness averse
E) fairness loving

Question

Quizplus · Accepted Answer

The standard economic model of consumer choice assumes that people are risk neutral, meaning that they are indifferent between a sure outcome and a gamble with the same expected value. This assumption simplifies the analysis of consumer behavior, but it is not always accurate in real-world situations where people may be risk averse or risk loving.

The Standard Economic Model of Consumer Choice Assumes That People