Chapter 3 Consumer Behavior Chapter Outline Consumer Preferences ·Budget Constraints 。Consumer Choice Marginal Utility and Consumer Choice Microeconomics (fitth edition) Author:Robert S.Pindyc,Daniel L.Rubinfeld
Chapter 3 Consumer Behavior Chapter Outline • Consumer Preferences • Budget Constraints • Consumer Choice • Marginal Utility and Consumer Choice • Microeconomics (fitth edition) • Author: Robert S. Pindyc, Daniel L. Rubinfeld
>Theory of consumer behavior-Description of how consumers allocate incomes among different goods and services to maximize their well-being(福利). >Consumer behavior is best understood in the following three distinct steps: Consumer Preferences √Budget Constraints √Consumer choices
➢ Theory of consumer behavior-Description of how consumers allocate incomes among different goods and services to maximize their well-being (福利). ➢ Consumer behavior is best understood in the following three distinct steps: ✓ Consumer Preferences ✓ Budget Constraints ✓ Consumer choices
3.1 Consumer Preferences >Market basket(购物篮)(or bundle)List with specific quantities of one or more goods. 3.1.1 Some Basic Assumptions about Preferences √Completeness(完备性)：Preferences are assumed to be complete.In other words,consumers can compare and rank all possible baskets
3.1 Consumer Preferences ➢ Market basket (购物篮) (or bundle) List with specific quantities of one or more goods. 3.1.1 Some Basic Assumptions about Preferences ✓ Completeness (完备性): Preferences are assumed to be complete. In other words, consumers can compare and rank all possible baskets
√Transitivity(传递性)：Preferences are transitive.Transitivity means that if a consumer prefers basket A to basket B and basket B to basket C,then the consumer also prefers A to C. √Nonsatiation(贪得无厌)：Consumers always prefer more of any good to less
✓ Transitivity (传递性): Preferences are transitive. Transitivity means that if a consumer prefers basket A to basket B and basket B to basket C, then the consumer also prefers A to C. ✓ Nonsatiation (贪得无厌) : Consumers always prefer more of any good to less
▣The theory of consumer choice rests on(取决于)the assumption that people behave rationally in an attempt to maximize the satisfaction that they can obtain by purchasing a particular combination of goods and services
❑ The theory of consumer choice rests on (取决于) the assumption that people behave rationally in an attempt to maximize the satisfaction that they can obtain by purchasing a particular combination of goods and services
3.1.2 Indifference curves Indifference curves,which represent all combinations of goods and services that give the same level of satisfaction, are downward-sloping and cannot intersect one another. Clothing B : (Units per week) 40 ◆ : ·: : 30 : 20 : : Food An Indifference Curve 40 (Units per week)
3.1.2 Indifference curves ❑ Indifference curves, which represent all combinations of goods and services that give the same level of satisfaction, are downward-sloping and cannot intersect one another. Clothing Food (Units per week) (Units per week) U1 A D H E G B 40 20 30 40 An Indifference Curve
The indifference curve U that passes through market basket A shows all baskets that give the consumer the same level of satisfaction as does market basket A;these include baskets B and D. Our consumer prefers basket E,which lies above U1,to A,but prefers A to H or G,which lie below U1
The indifference curve U1 that passes through market basket A shows all baskets that give the consumer the same level of satisfaction as does market basket A; these include baskets B and D. Our consumer prefers basket E, which lies above U1 , to A, but prefers A to H or G, which lie below U1
3.1.3 Indifference Maps Consumer preferences can be completely described by a set of indifference curves known as an indifference map. An indifference map provides an ordinal ranking(序数排列) of all choices that the consumer might make
➢ Consumer preferences can be completely described by a set of indifference curves known as an indifference map. An indifference map provides an ordinal ranking (序数排列) of all choices that the consumer might make. 3.1.3 Indifference Maps
Clothing (Units per week) D B 02 U Food (Units per week)
D B A U1 U2 U3 Food (Units per week) Clothing (Units per week)
>An indifference map is a set of indifference curves that describes a person's preferences. Any market basket on indifference curve U3,such as basket A, is preferred to any basket on curve U2(e.g.,basket B),which in turn(依次，轮流)is preferred to any basket on U,such as basket D
➢ An indifference map is a set of indifference curves that describes a person’s preferences. Any market basket on indifference curve U3 , such as basket A, is preferred to any basket on curve U2 (e.g., basket B), which in turn(依次，轮流) is preferred to any basket on U1 , such as basket D