Explain the idea of utility maximization as it relates to rational choice theory. Make sure to include important and relevant concepts that we have covered in the course thus far, such as consumer decisions and preference, budget constraints, and income and substitution effects.

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Utility Maximization in Rational Choice Theory Rational choice theory posits that individuals make decisions to maximize their utility which represents their satisfaction or wellbeing derived from consuming goods and servicesHeres how it works 1 Preferences and Indifference Curves Consumers have preferences over different bundles of goods represented by indifference curves An indifference curve shows all combinations of goods that provide the same level of utilityPoints further from the origin represent ... View the full answer