The Economic Model of Consumer Behavior Predicts That

question 260

Multiple Choice

The economic model of consumer behavior 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 divide their time between consumption and leisure activities in order to maximize social welfare.

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Definitions:

Usury Law

Legal regulations that set maximum interest rates which can be charged on loans, aimed at protecting consumers from exorbitant rates.

Shortage

The amount by which the quantity demanded of a product exceeds the quantity supplied at a particular (below-equilibrium) price.

Marginal Land

Land that is of poor quality for agriculture and unlikely to produce a profitable yield without significant investment in improvements.

Rents

Payments made for the use of property or land, or in economic theory, the excess returns to a factor of production over its opportunity cost.