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Microeconomics

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Utility Maximization for the Rational Individual

MICRO-QXCEGR

If the assumptions we typically have on preferences and utility hold (completeness, transitivity, and monotonically increasing), an individual who solves a utility maximization problem will

A

choose the consumption bundle lying on the highest indifference curve that he can attain given his budget constraint.

B

choose the most balanced bundle that he can afford.

C

choose any bundle in his budget constraint, because they all give him the same utility.

D

choose the consumption bundle lying on the indifference curve that is closest to the origin.