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GCE Economics 1990 Question 13

Question 13

Theory of Consumer Behaviour

The theory of consumer behaviour is based on all the following assumptions except that the

  1. A.consumer is assumed irrational
  2. B.consumer taste remains constant
  3. C.consumer has budget constraint
  4. D.consumer aims at maximizing his utility
  5. E.consumer is exposed to more than one commodity.
Show the answer and explanation

Answer: A (consumer is assumed irrational)

Explanation

Consumer theory assumes the consumer is rational, i.e. he tries to get the most satisfaction from his income.