The Theory of Consumer Behavior Assumes That Consumers Attempt to Maximize

question 102

Multiple Choice

The theory of consumer behavior assumes that consumers attempt to maximize

• A)the difference between total and marginal utility.
• B)total utility.
• C)average utility.
• D)marginal utility.

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Definitions:

Consumption

The act of using goods and services for personal needs or to satisfy consumer demands.

APS

Average Propensity to Save, the proportion of total income that is saved by the economy or an individual.

Consumption

Pertains to the aggregate volume of products and services that are purchased and consumed by families and people.

MPC

The marginal propensity to consume, which is the fraction of additional income that a household spends on consumption.