Principles of Consumer Choice — Budget Constraints, Indifference Curves, and Utility Explained | Chapter 21 of Principles of Microeconomics
Principles of Consumer Choice — Budget Constraints, Indifference Curves, and Utility Explained | Chapter 21 of Principles of Microeconomics How do consumers decide what to buy given limited income and varying prices? Chapter 21 of Principles of Microeconomics explores consumer choice theory , detailing the factors that influence purchasing decisions. This summary covers budget constraints, indifference curves, utility, and how income and substitution effects shape demand. 🎥 Watch the full chapter summary below and subscribe to Last Minute Lecture for more textbook breakdowns and academic study guides! Budget Constraint and Consumer Choices The budget constraint represents all consumption bundles a consumer can afford, given income and prices. Changes in income or prices shift the budget constraint outward or inward, affecting the range of choices available. Indifference Curves and Preferences Indifference curves depict combinations of goods that provi...