The economic analysis of consumer behavior begins with a model of rational behavior. The consumer is assumed to have a well-defined utility function that, coupled with a specification of the constraints facing the consumer, implies a specific action. This chapter develops and illustrates the nature of a utility function. The next two chapters add specifications of the constraints that face the consumer and derive the model’s implications.
Utility Function Marginal Utility Utility Level Indifference Curve Bliss Point
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in to check access.