Asked by Melis Simge Benli on Jul 25, 2024
Verified
Someone who pays $800 to fly from one city to another instead of paying only $100 for a bus trip between the two cities is making an irrational choice and is thus not maximizing his utility.
Maximizing Utility
The economic principle that individuals seek to obtain the highest level of satisfaction or benefit from their consumption choices.
Irrational Choice
Making decisions that go against or do not align with the rational decision-making model, often leading to less optimal or desirable outcomes.
- Comprehend the strategies employed by individuals to optimize pleasure in the face of fiscal constraints.
Verified Answer
BG
Breeann GarverJul 29, 2024
Final Answer :
False
Explanation :
Utility maximization is subjective and depends on individual preferences, such as valuing time over money, comfort, or convenience, which could justify the higher cost of flying over taking a bus.
Learning Objectives
- Comprehend the strategies employed by individuals to optimize pleasure in the face of fiscal constraints.
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