Chapter 9

Chapter 9 - Chapter 9: Consumer Choice and Behavioral...

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Chapter 9: Consumer Choice and Behavioral Economics Experimental economics has shown that factors such as social pressure and notions of fairness can affect consumer behavior Utility and Consumer Decision Making According to the law of demand, whenever the price of a good falls, the quantity demand increases The Economic Model of Consumer Behavior in a Nutshell Economists assume that consumers act so as to make themselves as well off as possible The economic model of consumer behavior predicts that consumers will choose to buy the combination of goods and services that make them as well off as possible from among all the combinations that their budgets allow them to buy Utility Utility- The enjoyment or satisfaction people receive from consuming goods and services The goal of a consumer is to spend available income so as to maximize utility The Principle of Diminishing Marginal Utility Marginal utility- the change in total utility a person receives from consuming one
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Chapter 9 - Chapter 9: Consumer Choice and Behavioral...

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