Consumer behavior, Microeconomics

Consumer Behavior

The description of how consumers allot their resources (income) to the purchase of various goods and services to get maximum in their well being.

There are three steps included in the study of consumer behavior.

             1) We will learn consumer preferences.

                     To explain how and why people select one good to the other.

            2) Then we will move to budget constraints.

                     People have restricted incomes.

            3) Then we will combine together consumer preferences and budget constraints to know about consumer choices.

                     What combination of goods will consumers purchase to maximize or enhance their satisfaction?

Consumer Preferences

Market Baskets

           A market basket is a group of one or more commodities.

                  One market basket can be preferred over the other market basket consisting a diverse combination of goods.

                  Three Basic Assumptions

1) Preferences are complete.

2) Preferences are transitive.

3) Consumers always select more of any good to less.

2025_Consumer preferences.png

Posted Date: 7/24/2012 9:12:57 AM | Location : United States







Related Discussions:- Consumer behavior, Assignment Help, Ask Question on Consumer behavior, Get Answer, Expert's Help, Consumer behavior Discussions

Write discussion on Consumer behavior
Your posts are moderated
Related Questions
Monica consumes only goods A and B. Suppose that her marginal uility from consuming good A is equal to 1/Qa, and her marginal utility from consuming good B is 1/Qb. If the price of

suppose your opponent is not playing her nash equilibrium strategy. Should you play nash equilibrium strategy?k question #Minimum 100 words accepted#

RATIONAL EXPECTATIONS AND ECONOMIC THEORY  : Much of undergraduate macroeconomic theory is discussed on the assumption that, in the short run, the expectations of economic age

Bank for International Settlements: An international financial regulatory organization based in Switzerland, Bernethat designs international regulations regarding capital adequacy

The Industrial Revolution The century after 1750, saw the industrial revolution proper: invention of steam engine, spinning jenny, power loom, hydraulic press, railroad locomot

Slutsky's Theorem: Graphical Presentation  We prove here that own price effect is the sum of own substitution effect and income effect for a price change, which is known

discuss the implications of various market structure for price determination

During its current tax year (year one) a pharmaceutical company purchased a mixing tank that had a fair market price of $120,000. It replaced the an older, smaller mixing tank that

critical of comparative advantage theory

This research will follow the methodology of econometrics; Chao, 2005; Castle & Shephard, 2009): 1. Specification of the model using a specific stochastic equation, together wit