In economics a rational consumer is defined as the people who act in a rational way and make rational choices, namely spending their money wisely. Utility is a term used to measure the amount of pleasure a consumer gains from a good or service they choose to invest in, thus spending our money wisely, in economic terms is a method of maximizing our own utility. However in today’s world different societies and individuals have failed to distinguish the different between a want and a need, which has consequently made itself apparent through the fact that human beings are not rational. In order to be a rational consumer people must understand that a need is something that you need to survive, whereas a want isn’t a vital necessity needed to survive. Moreover, in order to get what we want we ignore the difference between the two and invest in products or services that do not provide us with high amounts of utils, yet we continue to make irrational choices. Therefore there are many factors concerning the reasons as to why human beings are not rational and how they are evident in the world today.
One of the underlying reasons as to why human beings are not rational is the fact that some do not live on the margin, thus they have more than enough money to buy everything they need and want. Although this does seem justified considering the wealthier status will have more money coming to them, it also shows how lazy and irrational human beings are. The lack of knowledge that surrounds individuals is evident through the products we buy at a ridiculous price when we could buy them somewhere else at a much cheaper price. Therefore, instead of taking the time to evaluate and compare the different prices of the same product we chose to buy it the first time we ...