A Level Economics AQA Practice Exam

Utility Maximisation suggests that individuals make decisions to:

1. Minimize overall costs

2. Select the option with the greatest utility

3. Follow set social norms

4. Redistribute wealth among society

The correct answer is: Select the option with the greatest utility

Utility maximization is a key concept in economics, referring to the idea that individuals make choices aimed at achieving the highest level of satisfaction or utility possible from their available resources. Choosing the option that yields the greatest utility aligns perfectly with this principle, as individuals are driven by their preferences and the utility derived from the consumption of goods and services. When faced with different alternatives, individuals evaluate the potential satisfaction each option can provide and select the one that maximizes their overall happiness or benefit. This decision-making process is influenced by various factors, including personal preferences, constraints such as income, and the prices of goods and services available in the market. The concept of utility plays a critical role in understanding consumer behavior and the choices they make in pursuit of maximizing their satisfaction. The other choices involve considerations that are not primarily about maximizing personal utility. Minimizing costs focuses on economic efficiency rather than the enjoyment derived from goods and services. Following set social norms emphasizes behavior that aligns with societal expectations rather than personal satisfaction. Redistributing wealth among society pertains to equity and fairness, which are separate from the idea of individuals maximizing their own utility.