28 Questions
What are the three steps of consumer behavior?
The three steps of consumer behavior are preference, budget constraints, and consumer choice.
True or false:Consumer theory is based on inferring what people dislike from their choices.
False
Consumer theory is based on inferring what people like from their ______.
choices
What are the three steps to understanding consumer behavior?
Preference, budget constraints, and consumer choice
What is denoted by the symbol ≻ in consumer theory?
Strict preference
True or false: Consumer behavior can be understood in two steps: preference and budget constraints.
False
Consumer behavior can be understood in three steps: preference, budget constraints, and consumer ______.
choice
What is strict preference denoted by?
Strict preference is denoted by ≻.
Consumers compare bundles of goods and decide if one is preferred over the other, or if they are ______.
indifferent
What is utility?
Utility is the satisfaction or pleasure derived from consuming a good or service.
What is utility?
The satisfaction or pleasure derived from consuming a good or service
True or false: Consumers compare bundles of goods and decide if one is preferred over the other, or if they are indifferent.
True
Strict preference is denoted by ≻, ______ by ∼, and weak preference by ⪰.
indifference
Is utility subjective or objective?
Subjective
True or false: Strict preference is denoted by ∼.
False
Are utility and usefulness synonymous?
No, utility and usefulness are not synonymous.
True or false: Utility is the satisfaction or pleasure derived from consuming a good or service.
True
Is utility subjective?
Yes, utility is subjective and varies from person to person.
Relations between strict preference, weak preference, and ______ are related.
indifference
Do utility and usefulness mean the same thing?
No
Can utility differ at different times and places?
Yes, utility can differ at different times and places.
Can utility differ at different times and places?
Yes
True or false: Utility is objective and the same for everyone.
False
Utility is the satisfaction or pleasure derived from consuming a good or ______.
service
Do non-smokers derive any utility from cigarettes?
No
Do non-smokers derive any utility from cigarettes?
No, non-smokers do not derive any utility from cigarettes.
Non-smokers do not derive any utility from ______.
cigarettes
True or false: Non-smokers derive utility from cigarettes.
False
Study Notes
- Consumer theory is based on inferring what people like from their choices.
- Consumer behavior can be understood in three steps: preference, budget constraints, and consumer choice.
- Consumers compare bundles of goods and decide if one is preferred over the other, or if they are indifferent.
- Strict preference is denoted by ≻, indifference by ∼, and weak preference by ⪰.
- Relations between strict preference, weak preference, and indifference are related.
- Utility is the satisfaction or pleasure derived from consuming a good or service.
- Utility and usefulness are not synonymous.
- Utility is subjective and varies from person to person.
- Utility can differ at different times and places.
- Non-smokers do not derive any utility from cigarettes.
Test your understanding of consumer theory and behavior with this quiz! Learn about preferences, budget constraints, and consumer choice, and explore the concepts of strict preference, weak preference, and indifference. Discover how utility plays a role in consumer decisions and why it varies from person to person. See if you can ace this quiz and become a pro at analyzing consumer behavior!
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