Practicing Success
Read the following passage and answer, question. A consumer is a rational individual who knows, what is good and bad for him/her. So he always tries to achieve the best to get maximum satisfaction. Thus, the consumer chooses the set of bundles as per his preference which is best for him. The consumer always prefers to move to a point on the highest possible indifference curve given on the budget set. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market. |
A rational consumer is the one who has: |
Many set of bundles Monotonic preference High budget Not ready to substitute one good for the other |
Monotonic preference |