Economics (McConnell) AP Edition, 19th EditionChapter 6:
Consumer Behavior (+ Appendix)The content of this chapter may be included on the AP* Microeconomics exam. After reading this chapter, you should be able to: - Define and explain the relationship between total utility, marginal utility, and the law of diminishing marginal utility.
- Describe how rational consumers maximize utility by comparing the marginal utility-to-price ratios of all the products they could possibly purchase.
- Explain how a demand curve can be derived by observing the outcomes of price changes in the utility-maximization model.
- Discuss how the utility-maximization model helps highlight the income and substitution effects of a price change.
- Relate how behavioral economics and prospect theory shed light on many consumer behaviors.
- (Appendix) Relate how the indifference curve model of consumer behavior derives demand curves from budget lines, indifference curves, and utility maximization.
AP Chapter 06 Introduction
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