 | Learning Objectives
(See related pages)
In this chapter you will learn:
- About total utility, marginal utility, and the law of diminishing marginal utility.
- How rational consumers compare marginal utility-to-price ratios for products in purchasing combinations of products that maximize their utility.
- How a demand curve can be derived by observing the outcomes of price changes in the utility-maximization model.
- How the utility-maximization model helps highlight the income and substitution effects of a price change.
- About budget lines, indifference curves, utility maximization, and demand derivation in the indifference curve model of consumer behavior. (Appendix)
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