Demand Theory: Preferences

  • Michael R. Hammock
  • J. Wilson Mixon


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 
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  1. 1.
    Arrow KJ, Chenery HB, Minhas BS, Solow RM (1961) Capital-labor substitution and economic efficiency. Rev Econ Stat 43:225–250CrossRefGoogle Scholar
  2. 2.
    Cobb CW, Douglas PH (1928) A theory of production. Am Econ Rev 18(Suppl.):139–165Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2013

Authors and Affiliations

  • Michael R. Hammock
    • 1
  • J. Wilson Mixon
    • 2
  1. 1.Department of Economics and FinanceMiddle Tennessee State UniversityMurfreesboroUSA
  2. 2.Berry CollegeMount BerryUSA

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