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Theory Of Consumer Behaviour

How a consumer gets the most satisfaction from a fixed budget: utility, indifference curves, the budget line, demand and elasticity.

4 micro-lessons8 concepts

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Before we begin

Prerequisite check for linear equations, basic graphing, and percentages.

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Before You Start — Check What You Know

Quick Math Check

Diagnostic on solving linear combinations and calculating percentage change.

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Find the slope of the linear equation $5x + 10y = 50$ .

Hint

Concept: graphing-linear-equations

Try rearranging the equation into the slope-intercept form ( $y = mx + c$ ) to identify the slope ( $m$ ).

The Problem of Choice

Introduction to the consumer's dilemma: balancing likes and affordability.

By the end of this chapter, you'll be able to solve problems like this: If you only have ₹40 in your pocket, and bananas cost ₹5 each while mangoes cost ₹10 each, what exact combination of bananas and mangoes should you buy to get the maximum possible satisfaction?

This is the fundamental problem of Consumer Behaviour. Every day, we face a budget constraint. We have a limited income, but we want a combination of goods that gives us the highest level of utility (satisfaction).

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