The Scope of Economics
Economics is often considered a business
discipline, but it is a social science.
How do people make choices regarding the
use of resources?
This question is far broader than business
We assume that people will mak
Consumer Choice Theory
Consumers will make consumption decisions
that maximize their utility relative to their cost.
They do this by weighing the benefits and
costs from a specific decision.
Consumer choice theory models this
The laws of supply and demand state that as
prices change, seller and buyer behavior will
change. But by how much?
Elasticity is how we measure this.
There are different types of elasticity that
measure different things.
The most important