Economics (McConnell), 18th Edition

Chapter 7: Consumer Behavior (+ Appendix)

IN THIS CHAPTER YOU WILL LEARN:

1. About total utility, marginal utility, and the law of diminishing marginal utility.



2. How rational consumers compare marginal utility-to-price ratios for products in purchasing combinations of products that maximize their utility.



3. How a demand curve can be derived by observing the outcomes of price changes in the utility-maximization model.



4. How the utility-maximization model helps highlight the income and substitution effects of a price change.



5. (Appendix) About budget lines, indifference curves, utility maximization, and demand derivation in the indifference curve model of consumer behavior.