Individuals have the freedom to choose between different bundles of goods and services. Consumer theory seeks to predict their purchasing patterns by making the following th… See more

Building a better understanding of individuals’ tastes and incomes is important because it has a big bearing on the demand curve, which is the relationship between th… See more

Let’s look at an example. Kyle is a consumer with a budget of $200 who must choose how to allocate his funds between pizza and video games (the bundle of goods). If … See more

Challenges to developing a practical formula for this situation are numerous. For instance, as behavioral economics points out, people are not always rational and are occasionall… See more