Micro: 1.2.1 Rational decision making

Question 1

What do consumers aim to maximise?

Answer 1

Consumers aim to maximise the utility they derive from purchasing goods or services.

Question 2

What do firms aim to maximise?

Answer 2

Firms aim to maximise their utility by selling goods and services for the maximum possible profit.

Question 3

What assumptions are made in supply and demand models?

Answer 3

Assumptions are made about consumers and producers as economic agents who seek to maximise their utility.