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

Economic situattion, what is the current economic situation in the world?

what is the current economic situation in the world?

Member of the wto, Q. It has been claimed that the Chinese burst of modern...

Q. It has been claimed that the Chinese burst of modernization which has been propelling its manufactured exports throughout the world at an unprecedented rate, is made possible b

Explain why ems countries decided to fix their exchange rate, Q. Ex...

Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi

IMF''s Role in European zero-euro debt crisis, What exactly is IMF and why ...

What exactly is IMF and why is it so important in helping Europe? How exactly does it help Europe and what effects does its help have on rest of the world?

Present the case for floating exchange rates, Q. Present the case f...

Q. Present the case for floating exchange rates. Answer: 1. Monetary policy autonomy Governments would able to use financial policy to reach internal and extern

Double factors terms of trade, Calculate the doublefactoral terms of trade ...

Calculate the doublefactoral terms of trade (TD), formulated by Jacob Viner based on following information: Suppose in the base year of 2015, Px= 100, Pm= 100, Zx= 100, Zm= 100and

What do you mean by public expenditure, Q. What do you mean by Public Expen...

Q. What do you mean by Public Expenditure? The central governments have the responsibility of implementing various developmental programmes and bring about economic and social

What is the domino effect or contagion, Q. What is the domino effect ...

Q. What is the domino effect or contagion? Answer: The definition is the defencelessness of even seemingly healthy economies to crisis of confidence generated by events

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