Chapter 3 Consumer Behavior
Chapter 3 Consumer Behavior
Topics to be Discussed a Consumer Preferences a Budget Constraints ■ Consumer Choice Revealed Preferences Chapter 3: Consumer Behavior Slide 2
Chapter 3: Consumer Behavior Slide 2 Topics to be Discussed ◼ Consumer Preferences ◼ Budget Constraints ◼ Consumer Choice ◼ Revealed Preferences
Topics to be Discussed a Marginal Utility and Consumer Choices ■ Cost-of-Living Indexes Chapter 3: Consumer Behavior Slide 3
Chapter 3: Consumer Behavior Slide 3 Topics to be Discussed ◼ Marginal Utility and Consumer Choices ◼ Cost-of-Living Indexes
Consumer Behavior a TWo applications that illustrate the importance of the economic theory of consumer behavior are o Apple-Cinnamon Cheerios o The Food stamp Program Chapter 3: Consumer Behavior Slide 4
Chapter 3: Consumer Behavior Slide 4 Consumer Behavior ◼ Two applications that illustrate the importance of the economic theory of consumer behavior are: ⚫ Apple-Cinnamon Cheerios ⚫ The Food Stamp Program
Consumer Behavior a General mills had to determine how igh a price to charge for Apple Cinnamon Cheerios before it went to the market Chapter 3: Consumer Behavior Slide 5
Chapter 3: Consumer Behavior Slide 5 Consumer Behavior ◼ General Mills had to determine how high a price to charge for AppleCinnamon Cheerios before it went to the market
Consumer Behavior a When the food stamp program was established in the early 1960s, the designers had to determine to what extent the food stamps would provide people with more food and not just simply subsidize the food they would have boug ht anyway Chapter 3: Consumer Behavior Slide 6
Chapter 3: Consumer Behavior Slide 6 Consumer Behavior ◼ When the food stamp program was established in the early 1960s, the designers had to determine to what extent the food stamps would provide people with more food and not just simply subsidize the food they would have bought anyway
Consumer Behavior a These two problems require an understanding of the economic theory of consumer behavior Chapter 3: Consumer Behavior Slide 7
Chapter 3: Consumer Behavior Slide 7 Consumer Behavior ◼ These two problems require an understanding of the economic theory of consumer behavior
Consumer Behavior a There are three steps involved in the study of consumer behavior 1)We will study consumer preferences To describe how and why people prefer one good to another Chapter 3: Consumer Behavior Slide 8
Chapter 3: Consumer Behavior Slide 8 Consumer Behavior ◼ There are three steps involved in the study of consumer behavior. 1) We will study consumer preferences. ◆To describe how and why people prefer one good to another
Consumer Behavior a There are three steps involved in the study of consumer behavior 2) Then we will turn to budget constraints People have limited incomes Chapter 3: Consumer Behavior Slide 9
Chapter 3: Consumer Behavior Slide 9 Consumer Behavior ◼ There are three steps involved in the study of consumer behavior. 2) Then we will turn to budget constraints. ◆People have limited incomes
Consumer Behavior a There are three steps involved in the study of consumer behavior 3)Finally, we will combine consumer preferences and budget constraints to determine consumer choices . What combination of goods will consumers buy to maximize their satisfaction? Chapter 3: Consumer Behavior Slide 10
Chapter 3: Consumer Behavior Slide 10 Consumer Behavior ◼ There are three steps involved in the study of consumer behavior. 3) Finally, we will combine consumer preferences and budget constraints to determine consumer choices. ◆What combination of goods will consumers buy to maximize their satisfaction?
