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Pearson Edexcel IAL Economics 1.3.2.1a assumption of rationality in deci

Practise applying rational choice to consumer decisions, especially switching supplier or reducing purchases when prices change.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • identify rational behaviour where consumers switch supplier to gain savings or utility
  • explain reduced demand after a price rise as consumers acting to maximise utility

1.3.2.1a - assumption of rationality in decision making: consumers aim decision making to maximise question 1

[Maximum number: 1]

In April 2020 electricity prices increased on average by 10% in the UK. In the same month, a record number of 668371 consumers switched to cheaper electricity suppliers.

Which one of the following can explain the behaviour of those consumers who switched to cheaper electricity suppliers?

A

Consumers experienced habitual behaviour

B

Consumers aimed to maximise their utility

C

Consumers had poor computational skills

D

Consumers aimed to minimise their utility

All question bank results loaded