The economic model of consumer behaviour predicts that
A) consumers will try to earn as much income as they can over their lifetimes.
B) consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy.
C) consumers will try to accumulate as many goods and services as they can before they die.
D) consumers will divide their time between consumption and leisure activities in order to maximise social welfare.

Question

Quizplus · Accepted Answer

The economic model of consumer behaviour assumes that consumers have a limited budget and will choose the combination of goods and services that gives them the highest possible level of satisfaction. This is known as utility maximization, and it means that consumers will allocate their spending in a way that maximizes the satisfaction they get from the goods and services they purchase. Therefore, choice B - consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy - is the most accurate prediction of consumer behaviour.

The Economic Model of Consumer Behaviour Predicts That