Chapter 3, Problem 12AA

Solution

Meaning of rational consumer choice is to be explained.

When the consumer decision takes place on the basis of opportunity cost is called rational choice. Rational choice involves choosing the best alternative that is less expensive as compared to other goods. Consumers always choose the goods that would best satisfy their wants.Every consumer has different value of expenditure. So, there will be billions of rational choices based on the different expenditure value of different consumers.