Final answer:
People will make rational decisions based on the extent to which they expect the choice to maximize their profits and minimize their costs is called Utility theory. Therefore, the correct option is c.
Step-by-step explanation:
Utility theory posits that people make rational decisions based on the extent to which they expect a choice to maximize their profits and minimize their costs. This economic concept is grounded in the idea that individuals act in a way that maximizes their overall satisfaction or utility. According to utility theory, decision-makers weigh the benefits and costs of various options and choose the one that offers the highest level of satisfaction.
In utility theory, the term "utility" represents the satisfaction or happiness derived from a particular choice. Individuals are assumed to make rational decisions by evaluating the utility associated with each option and selecting the one that maximizes their overall well-being. This theory is foundational in understanding economic decision-making, providing insights into consumer choices, business strategies, and various economic behaviors.
Utility theory is distinct from behavioral economics, game theory, and supply and demand, as it specifically focuses on how individuals make choices to optimize their well-being by considering the expected benefits and costs of their decisions.
Therefore, the correct option is c.