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Ch 3: Microeconomics & Consumer Behavior

About This Chapter

Watch the engaging video lessons in this chapter and take the accompanying quizzes to strengthen your knowledge of microeconomics and consumer behavior. Utilizing these learning tools can help you study for an upcoming exam, improve your grades or earn course credits.

Microeconomics & Consumer Behavior - Chapter Summary

Your study of microeconomics and consumer behavior is made simple with help from this comprehensive chapter. Fun lessons provide in-depth analyses of utility maximization, indifference curves, consumer preferences, choice in economics and more. Review these lessons whenever your schedule permits using any computer or mobile device with Internet access. Find out how much you understand about the concepts they cover by taking short quizzes and a practice exam. In no time, you will have the knowledge to:

  • Define the consumer in microeconomics
  • Describe the individual demand curve
  • List factors that affect the market demand curve and understand how this curve is used and calculated
  • Discuss substitution and income effects
  • Provide details about normal and inferior goods in microeconomics
  • Explain how the Engel curve influences individual demand
  • Describe the rate of transformation and budget lines in economics
  • Share the definition of the marginal rate of substitution
  • Examine economics assumptions about the maximization of utility
  • Discuss various consumer theories in economics

17 Lessons in Chapter 3: Microeconomics & Consumer Behavior
Test your knowledge with a 30-question chapter practice test
Who Is the Consumer in Microeconomics?

1. Who Is the Consumer in Microeconomics?

A consumer is an individual, a group of people, or an organization which are final users of a product or service. Examine the assumptions of consumers in microeconomics, which aims to understand the consumer thought process and its effect on businesses.

Utility Maximization: Budget Constraints & Consumer Choice

2. Utility Maximization: Budget Constraints & Consumer Choice

In utility maximization, consumers strive to spend money in ways that provide the greatest amount of resources and satisfaction for the least cost. Learn about budget constraints and consumer choices in the context of utility maximization, review utility as it pertains to consumers, and understand why consumers care about this and the impact if they ignore it.

Economics Assumptions about the Maximization of Utility

3. Economics Assumptions about the Maximization of Utility

Utility refers to the measurement of the usefulness of something when applied, which is an important factor in economics and maximizing efficiency. See the importance of utility to producers and what can happen if it's ignored in business practices.

What is Marginal Utility? - Definition, Theory, Formula & Example

4. What is Marginal Utility? - Definition, Theory, Formula & Example

Marginal utility is when there's a variance in satisfaction during consumption, in this case, slices of pizza. Learn more about the theory and definition of total and marginal utility, how the utility formula is calculated, and how it can be applied using pizza consumed as an example.

Diminishing Marginal Utility: Definition, Principle & Examples

5. Diminishing Marginal Utility: Definition, Principle & Examples

Diminishing marginal utility is the economic principle that argues the more of a good thing a consumer has the less satisfaction they receive. Explore the principle of diminishing marginal utility and learn through examples like the implications of eating a slice of pizza.

Understanding the Individual Demand Curve

6. Understanding the Individual Demand Curve

An individual demand curve identifies the demand of an individual person. Learn how the changes in variables shift the graphed curve and how an equilibrium with supply can be achieved through an example.

Factors that Affect the Market Demand Curve

7. Factors that Affect the Market Demand Curve

The market demand curve represents the cumulative demand by consumers by combining individual demand curves. Learn the factors that influence the market demand curve, and how these shifts and equilibrium are measured.

Calculating & Using the Market Demand Curve in Microeconomics

8. Calculating & Using the Market Demand Curve in Microeconomics

Market demand curves can be calculated using individual demand curves. Learn how this understanding guides businesses in engaging with consumers and responding to shifts in the demand curve.

Substitution & Income Effects: Impacts on Supply & Demand

9. Substitution & Income Effects: Impacts on Supply & Demand

The substitution effect is where a product is replaced by a similar product that is lower in price. Study the substitution and income effects and their impacts on supply and demand.

Normal & Inferior Goods in Microeconomics

10. Normal & Inferior Goods in Microeconomics

In microeconomics, the type of goods can be described by how they are affected by the income change of the consumers. Learn about the normal and inferior types of goods, and determine their differences, characteristics, and examples.

How the Engel Curve Influences Individual Demand

11. How the Engel Curve Influences Individual Demand

The Engel Curve is a tool used by economists to understand demand by accounting for income. Master the mechanics of the curve, learn how producers use it, and understand the concept of inferior and normal goods.

Consumer Preferences & Choice in Economics

12. Consumer Preferences & Choice in Economics

In economics, assumptions are made about consumer preference based on the utility, or satisfaction they are likely to glean from their purchasing choices. Learn more about the definition of consumer preference and the three basic assumptions made about them, which are categorized as completeness, transitivity, and non-satiation.

Consumer Theories in Economics: Decision Making, Incentives & Preferences

13. Consumer Theories in Economics: Decision Making, Incentives & Preferences

There are various forms of consumer theories in economics that explain how or why a customer may choose to buy something and when. Learn more about the motivation of customers, maximizing utility, decision making, incentives and preferences.

Budget Lines & the Rate of Transformation in Economics

14. Budget Lines & the Rate of Transformation in Economics

In economics, the rate of transformation model can be used to visualize the concept of budget constraints. Learn more about budget constraints, budgets lines, the rate of transformation curve, and how to maximize the utility of the concepts.

Indifference Curves: Use & Impact in Economics

15. Indifference Curves: Use & Impact in Economics

In economics, indifference curves show which goods in the marketplace bring equal satisfaction to consumers, leaving them indifferent to which goods they purchase. Explore the definition, learn about their use and impact in economics, and review how they work.

Marginal Rate of Substitution: Definition, Formula & Examples

16. Marginal Rate of Substitution: Definition, Formula & Examples

The marginal rate of substitution shows how quickly a person will substitute or replace one product for a different one. Study the definition, formula, and examples of the marginal rate of substitution, how producers use it, and differing quantities.

The Indifference Curve for Substitutes & Complements in Economics

17. The Indifference Curve for Substitutes & Complements in Economics

The relationships that goods have with each other can often affect it's buyer and seller activity. Learn more about the indifference curve for substitutes and complements in economics, effects on goods, their uses, and examples.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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More Exams
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