Question

The preferences of the representative consumer over consumption and leisure are represented by use of a Select one: A. benefit function. B. production function. C. preference function. D. dynamic function. E. utility function.

Answer 1

The preferences of a consumer over consumption and leisure are represented by a utility function, which illustrates satisfaction or utility derived from various choices made within their budget constraints.

Step-by-step explanation:

The preferences of the representative consumer over consumption and leisure are represented by the use of a utility function. An utility function reflects the level of satisfaction or happiness that a consumer derives from consuming goods and services, and it is used to demonstrate how consumption and leisure relate to overall well-being. Individuals may make choices to maximize their utility given their preferences and budget constraints, as illustrated in various economic models including those that consider intertemporal choices and the trade-off between consumption and leisure.