Answer to Question #123067 in Microeconomics for Alum Rathore

Question

: A 45 years old women went to market to buy some commodities e.g. chicken, cooking oil, cloths for her own and medicine for her younger kid who is feeling sick. A woman is rational and
has limited amount of money in hand, furthermore that she is not educated, but she follows economics in the same manner as economics graduate. How would you think she will make decision for her shopping which gives her maximum utility (purchased basket of good), Compare your answer with definition of economics by a well-known economist explain it?

Answer 1

In economics concept that, when making a purchase decision, a consumer attempts to get the greatest value possible from expenditure of least amount of money. His or her objective is to maximize the total value derived from the available money.

For her to obtain the greatest utility the consumer should allocate money income so that the last dollar spent on each good or service yields the same marginal utility.

In these case Consumers are assumed to make choices, especially concerning the purchase of goods, such that they obtain the highest possible level of satisfaction.