Scenario 5.1 The Demand for Noodles Is Given by the Following Equation

question 97

Multiple Choice

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10.
-When economists describe the theory of consumer choice, they

• A)portray people as simple and methodical with perfectly predictable patterns of behavior.
• B)assert that consumer's decisions are based on which goods and services give them the greatest utility within their limited incomes.
• C)point out that consumers rarely consider utility in their purchase decisions; they look at other factors like convenience, peer behavior, and price.
• D)assert that the retail price is the only variable consumers really consider in making their purchasing decisions.
• E)admit that consumer behavior is random and there is no credible economic theory to explain the phenomenon.