Question

You are trying to decide between two shirts: a red one and a green one. You decide to buy the green shirt, because you like the color. This means that you demanded the green shirt based on _____.
population
climate
preference

Answer 1

Preference would be the logical answer. It could not be population (the number of residents in a selected area) or climate (an area's weather). Preference means your personal choice.

Answer 2

The correct answer is: "preference".

Preferences are one of the main mechanisms that shape individual decision-making in economics, together with the amount of budget available. Consumers decide between two goods depending on whether they can afford or not their price (for example, if these pertained to different brands and are priced differentely) and their individual preferences, which are connected to the utility or amount of satisfation that the product brings to the consumer. Hence, preferences and budget are the main components which are used to build the individual demand functions in economic theory.