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Chapter 8 · Part 2

Consumer Behavior and Demand

Utility, indifference curves & the law of demand — how buyers decide.

34
Concepts
3
Formulae
13 min
Read time
Intermediate

Learning objectives

  • 1Explain 1 Understanding Consumer Preferences and Choice
  • 2Explain the Fundamental Consumer Problem
  • 3Explain preferences and the Concept of Utility
  • 4Explain total Utility and Marginal Utility
  • 5Explain 2 Preferences Through Indifference Curves
  • 6Explain moving Beyond Numbers to Rankings

Your learning path

Introduction
8.1 Understanding Consumer Preferences and Choice
The Fundamental Consumer Problem
Preferences and the Concept of Utility
Total Utility and Marginal Utility
8.2 Preferences Through Indifference Curves
Moving Beyond Numbers to Rankings
Marginal Rate of Substitution: The Rate of Trade-off
Properties of Indifference Curves
Summary
Quiz
Revision
Follow the full path

Key terms

DirectionconvexdemandUtilitytangencydownwardaffordablePreferencesbudget lineprice ratioSubstitutesComplementsPrice Changedemand curveNormal GoodsUnit Elastic
34Concepts
3Formulae
13Minutes
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