The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3

-Individuals behave so as to maximize their utility.

Question

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3
 
-Individuals behave so as to maximize their utility.

Quizplus · Accepted Answer

This statement is one of the basic assumptions of the rational choice theory, which is often used in economics to explain individual behavior. According to this theory, individuals make rational decisions that maximize their utility or satisfaction.

The Below Figure Shows the Various Combinations of the Goods