this point Alison cannot increase her total utility any further by
rearranging her purchases between the two products.
Consider what Alison is doing. She is faced with a set of prices that she
cannot change. She responds to these prices and maximizes her utility by
adjusting the things that she can change—the quantities of the various
products she purchases—until Equation 6-2 is satisfied for all pairs of
products.
Is This Realistic?
It may seem unrealistic to argue that consumers maximize utility in the
precise way we have described. After all, not many of us stand in the
aisles of a store and compute ratios of marginal utilities and prices and
then adjust our consumption exactly as suggested by Equation 6-2.
Keep in mind, though, that utility theory is used by economists to predict
how consumers will behave when faced with such events as changing
prices and incomes. As long as consumers seek to do the best they can for
themselves with their limited resources, the consumer’s actual thought
process does not concern us. The theory is not meant to be a description
of how they reach their decisions but is rather a convenient way of
discovering the implications of their maximizing behaviour. Like many
theories, utility-maximization theory leads to predictions that can be
tested empirically. Economists continue to use the theory of utility
maximization because its predictions are rarely rejected by the data. One
of the most important of these predictions is that consumers who act as if
they are following a rule like Equation 6-2 have negatively sloped