1. Making choices on the basis of preferences. In this sense a consumer is rational if he always chooses the feasible alternative that he most prefers. The choice of an alternative that is not the best is irrational.

2. Possessing preferences that satisfy a set of axioms. Let ≿ represent the statement ‘at least as good as’. The standard axioms of consumer theory for choice under certainty are:

1. 1. Completeness: for any two alternatives x and y either x ≿ y or y ≿ x;

2. 2. Reflexivity: x ≿ x for any alternative x; and

3. 3. Transitivity: for any three alternatives x, y, and z, if x ≿ y and y ≿ z then x ≿ z.

If a consumer’s preferences satisfy these axioms he can be described as rational. This is not the only set of possible axioms, so ‘rationality’ in this sense is not uniquely defined.