Asked by Mikey Grauso on Jul 18, 2024
Verified
A rational consumer will try to achieve the highest indifference curve that his or her income will allow.
Indifference Curve
A graphical representation in economics indicating different combinations of two goods that provide the consumer with equal levels of satisfaction.
Rational Consumer
An individual who makes choices that result in the highest level of personal utility or satisfaction.
- Understand utility maximization principles within the indifference curve framework.
Verified Answer
BS
Brandon SpenceJul 20, 2024
Final Answer :
True
Explanation :
A rational consumer will strive to reach the highest possible level of satisfaction or utility, depicted by the highest indifference curve. However, the consumer's income will set a limit on how high the indifference curve can be. Therefore, the consumer will aim to reach the highest attainable indifference curve given his or her income.
Learning Objectives
- Understand utility maximization principles within the indifference curve framework.