What is a key assumption of rational consumer choice theory?
Choose 1 answer:
(A) Consumers maximize profit
(B) Consumers spend their money on the cheapest goods
(C) Consumers leave some of their budget unspent
(D) Consumers are satisficers
(E) Consumers maximize total utility

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Accepted Answer

∻Solution∻ ‖ a ⋮ Rational Consumer Choice Theory: This theory assumes that consumers aim to maximize their total utility given their budget constraints. ‖ ‖ b ⋮ Key Assumption: The key assumption is that consumers make choices to maximize their total utility, not necessarily to maximize profit, spend on the cheapest goods, leave budget unspent, or be satisficers. ‖ ∻Answer∻ ⚹ (E) Consumers maximize total utility ⚹ ∻Key Concept∻ ⚹ Rational Consumer Choice Theory ⚹ ∻Explanation∻ ⚹ The key assumption of rational consumer choice theory is that consumers aim to maximize their total utility given their budget constraints. This means they allocate their resources in a way that provides them with the highest possible satisfaction. ⚹◊What is the significance of the key assumption of rational consumer choice theory in Microeconomics?⍭ Generate me a similar question◊

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