Publication Year

1978

Keywords

Economics, theory, consumption, production, indifference

Disciplines

Economics | Economic Theory | Social and Behavioral Sciences

Abstract

Theories of consumer and producer behavior are at the core of microeconomic analysis. This paper will consider two of these theories, the indifference theory of consumption and the isoquant/isocost theory of production.

Indifference theory is one approach to the problem of consumer choice. The consumer must decide which commodities to purchase, in what quantities, and with what frequency. Indifference theory approaches this problem for a given moment in time and assumes that commodity prices and the individual's income and tastes are known. These factors, plus certain assumptions about the behavior of the consumer, enable this model to determine which commodities will be purchased by the consumer, and in what quantities.

Department 1 Awarding Honors Status

Economics

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