Chapter 1, Problem 6AA

To determine

To find the correct option that satisfies the sentence.

Answer to Problem 6AA

By making choices about what to buy, consumers reveal what they value most.

Explanation of Solution

Economics is the study of human behavior which focuses on the judicious use of scarce resources to fulfill the unlimited wants of the people.

People have to make choices between the consumption of two goods. They have limited income which can be used to buy limited goods.

For instance, if there are two combinations of apples and oranges: (2 apples, 4 oranges) or (4 apples, 2 oranges). The person has to decide whether to purchase first combination with more oranges or to buy other combination with more apples. One cannot buy both with limited purchasing power.

So, when the consumer buys combination 1 with more oranges, one is revealing his preference for oranges.