People try not to deliberately waste their valuable resources. Instead, they try to choose the options that best advance their personal desires and goals at the least possible cost. This is called economizing behaviour. Economizing behavior is the result of purposeful, or rational, decision making. When choosing among things of equal benefit, an economizer will select the cheapest option. For example, if a pizza, a lobster dinner, and a sirloin steak are expected to yield identical benefits for Mary (including the enjoyment of eating them), economizing behavior implies that Mary will select the cheapest of the three alternatives, probably the pizza. Similarly, when choosing among alternatives of equal cost, economizing decision makers will select the option that yields the greatest benefit. If the prices of several dinner specials are equal, for example, economizers will choose the one they like the best. Because of economizing behavior, the desires or preferences of individuals are revealed by the choices they make. Purposeful choosing implies that decision makers have some basis for their evaluation of alternatives. Economists refer to this evaluation as tility-the benefit or satisfaction that an individual expects from the choice of a specific alternative. Utility is highly subjective, often differing widely from person to person. The steak dinner that delights one person may be repulsive to another (a vegetarian, for example).
The idea that people behave rationally to get the greatest benefit at the least possible cost is a powerful tool. It can help us understand their choices. However, we need to realize that a rational choice is not the same thing as a “right” choice. If we want to understand people’s choices, we need to understand their own subjective evaluations of their options us they see them. As we have said, different people have different preferences. If Joan prefers $50 worth of chocolate to $SO worth of vegetables, buying the chocolate would be the rational choice for her, even though some outside observer might say that Joan is making a ‘‘bad‘’ decision. Similarly, some motorcycle riders choose to ride without a helmet because they believe the enjoyment they get from riding without one is greater than the cost (the risk of injury). When people weigh the benefits they receive from an activity against its cost, they are making a rational choice-even though it might not be the choice you or I would make in the same situation.

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