In the theory of consumer behaviour, a consumer has to decide how to spend her income on different goods. Economists call this the:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → problem of choice
A consumer has limited income and many goods to buy. Deciding how to spread her income over these goods is called the problem of choice.
NCERT (2026-27): “In this chapter, we will study the behaviour of an individual consumer. The consumer has to decide how to spend her income on different goods1. Economists call this the problem of choice. Most naturally, any consumer will want to get a combination of goods that gives her maximum satisfaction. … This depends on the likes of the consumer and what the consumer can afford to buy. …” |