Theory of consumer behavior, International Economics

Assignment Help:

Q. Write about the assumptions of the theory of consumer behavior based on the cardinal utility approach.

1. Rationality- It is assumed that the consumer is a rational being in the sense that he satisfied his wants in order of their preference

2. Limited money increment- He had a limited money income to spend in the goods and services to choose to consume

3. Maximization of Satisfaction- every rational consumer intends to maximize her satisfaction from given money income

4. Utility is cardinally measurable- The cardinalists have assumed that utility is cardinally measurable and that utility of one unit of a commodity equals the units of many which a consumer is prepared to pay for it

5. Diminishing marginal utility- It is assumed that utility gained from the successive units of a commodity consumed decreases as a person consumes them

6. Constant marginal utility of money- It remains constant whatever the level of a consumers income

7. Utility is additive- Not only utility is cardinally measurable, but also that utility derived from various goods and services consumed by a consumer can be added together to obtain the total utility.


Related Discussions:- Theory of consumer behavior

Example of external scale economies, Q. It is probable that trade based on...

Q. It is probable that trade based on external scale economies can leave a country worse off than it could have been without trade. Illustrate how this could happen. Answer:

#the classical theory of international trade title.., Critically evaluate t...

Critically evaluate the classical theory of international trade

Factor - proportions theory of international trade, Q. Why is it that Nort...

Q. Why is it that North-South trade in manufactures look to be consistent with the results or expectations generated by the factor-proportions theory of international trade, where

Title..Haberler''s theory of oppotunity cost, Explain about constant,increa...

Explain about constant,increasing and decreasing opportunity cost

Describing the classical theory of international trade, I am trying to comp...

I am trying to complete this homework assignment and I need to use an example to describe and explain the classical theory of international trade, could you guys help me out?

Domestic investment rates, Q. Explain why, according to Feldstein and Horio...

Q. Explain why, according to Feldstein and Horioka, one should expect that domestic investment rates diverge widely from saving rates. Answer: The decisions of corporations t

Absolute advantage by adam smith, which book by adam smith explains the abs...

which book by adam smith explains the absolute advantage ?

What monetary measures keep current exchange rate constant, Q. Suppose E is...

Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd