Theory of consumer behavior - Postolachi

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4.1. Consumer Behaviour: hypotheses and determinants 4.2. Total and Marginal Utility 4.3. Indiference curves 4.4. Consumers’ budget constraint 4.5. Consumer Equilibrium Objectives:  knowledge of elements of the consumer behavior model and their importance in decision making process;  explanation of the cardinal theory of consumer behavior in the context of:  deepening the notions of utility, total utility and marginal utility;  decreasing marginal utility ( I-st Law of Gossen);  total utility maximizing rule (II-nd Law of Gossen);  explanation of the ordinal theory of consumer behavior and its tools:  indifference curve and its properties for rational consumer;  budget line, taking into consideration the price of two goods and consumers income;  consumers equilibrium through equating the marginal rate of substitution (the slope of the indifference curve) to the ratio of goods prices (the slope of the budget line);  plotting income-consumption curve in terms of changes in income;  plotting price-consumption curve, analyzing the effects of changes in price of goods;  identification of the differences between the substitution and income effects;  determination of ways of practical application of the model of consumer behavior. ...