微观经济学Consumer Behavior.pptVIP

Chapter 3 Chapter 3 Consumer Behavior Introduction How are consumer preferences used to determine demand? How do consumers allocate income to the purchase of different goods? How do consumers with limited income decide what to buy? Introduction How can we determine the nature of consumer preferences for observations of consumer behavior? How can cost of living indexes measure the well-being of consumers? Consumer Behavior - Applications How would General Mills determine the price to charge for a new cereal before it went to the market? To what extent did the food stamp program provide individuals with more food versus merely subsidizing food they bought anyway? Consumer Behavior The theory of consumer behavior can be used to help answer these and many more questions Theory of consumer behavior The explanation of how consumers allocate income to the purchase of different goods and services Consumer Behavior There are three steps involved in the study of consumer behavior Consumer Preferences To describe how and why people prefer one good to another Budget Constraints People have limited incomes Consumer Behavior Given preferences and limited incomes, what amount and type of goods will be purchased? What combination of goods will consumers buy to maximize their satisfaction? Consumer Preferences How might a consumer compare different groups of items available for purchase? A market basket is a collection of one or more commodities Individuals can choose between market baskets containing different goods Consumer Preferences – Basic Assumptions Preferences are complete Consumers can rank market baskets Preferences are transitive If they prefer A to B, and B to C, they must prefer A to C Consumers always prefer more of any good to less More is better Consumer Preferences Consumer preferences can be represented graphically using indifference curves Indifference curves represent all combinations of market baskets that the person is indifferent to A person will be equally s