Consumer behaviour Flashcards
1
Q
What is consumer behaviour analyszed with?
A
Demand functions
2
Q
What is the process of consumer behaviour?
A
- defining preferences
- established budget constraints
- identifying best affordable options
3
Q
What do consumer preferences assumed to be?
A
- Rational (A or B) and transtive
- Monotonic (more if better)
4
Q
Key properties of indifference curves
A
- downward sloping graph due to monotonicity
- cant cross (consistent utility levels)
- Marginal rate of substitution
5
Q
Factors that affect demand
A
- Price of good (Law of demand, Giffen good)
- Income (normal and inferior good)
- Price of other good (Complements and subs)
- Income and subsitutional effects
- Expectation and beliefs
6
Q
What are preferneces asssumed to be
A
Stable and exogenous
7
Q
Consumers aim to maximise utility given …
A
Perfereneces
Constraints
Market conditions (monopoly?)
8
Q
If something is on the same indifference curve
A
Preferences are indifferent no care of different perferences
