Chapter Overview: Theory Of Consumer Behaviour

concepts · 8

1. 01

   Utility And Cardinal Analysis

   Calculate and relate Total Utility and Marginal Utility, applying the Law of Diminishing Marginal Utility.

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2. 02

   Ordinal Utility And Indifference Curves

   Understand indifference curves, calculate Marginal Rate of Substitution (MRS), and apply properties of indifference maps.

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3. 03

   The Consumer's Budget

   Formulate the budget constraint, calculate intercepts and slope, and diagram shifts vs. pivots.

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4. 04

   Optimal Choice Of The Consumer

   Determine the utility-maximizing bundle where the indifference curve is tangent to the budget line.

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5. 05

   Demand And Market Demand

   Derive the demand curve, classify goods, distinguish shifts from movements, and aggregate market demand.

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6. 06

   Elasticity Of Demand

   Calculate Price Elasticity of Demand using the percentage method.

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7. 07

   Elasticity On Curves And Expenditure

   Determine elasticity along a linear demand curve (geometric measure) and relate elasticity to total expenditure.

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8. 08

   Chapter Review

   Synthesize chapter concepts, test analytical applications of utility, budgets, and elasticity.

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