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

Trends in Internal Business, Since the 1990s there has been an increasing n...

Since the 1990s there has been an increasing number of Regional Trade Arrangements(RTA). According to WTO in 2012 the number of RTA increase 2 fold compared to the 90s to 497. Is r

Real income or economic welfare of the united states, Q. The Brazilian fir...

Q. The Brazilian firm is charging its foreign (U.S.) customers one half the price it is charging its domestic customers. Is this bad or good for the real income or economic welfa

Should the imf be abolished, Q. Should the IMF be abolished? Discuss...

Q. Should the IMF be abolished? Discuss. Answer: Arguments for eliminating the IMF must mention moral hazard and insistence on high interest rates and hasty structural

International trade, #question.what is the baises for international trade.

#question.what is the baises for international trade.

How does fall in real interest rate affect consumption, Q. Consider the eco...

Q. Consider the economy is initially consuming along the intertemporal budget constraint at point A, where no saving occurs. How does a fall in the real interest rate, r, and affe

Economic growth, Q. It is impossible for economic growth in a small countr...

Q. It is impossible for economic growth in a small country to lower that country's economic welfare, regardless of the bias of the growth. Explain. Answer: This is a true st

International trade, why is international trade important for south africa

why is international trade important for south africa

Risk of financial crisis, Q. Discuss the role of more "transparency" ...

Q. Discuss the role of more "transparency" in reducing the risk of financial crisis. Answer: Must discuss the Asian crisis where foreign banks lent money to Asian enter

International trade, why is international trade important for south africa

why is international trade important for south africa

Law of reciporcal demand, offer curves, terms of trade and terms of trade a...

offer curves, terms of trade and terms of trade as a measure of gain

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