1. A. “Demand and Consumer Choice”, including addendum “Consumer Choice and Indifference Curves” The candidate should be able to: a. explain consumer choice in an economic framework; Principles behind Consumer Choice i) Limited income versus unlimited desires necessitates choices. ii) Consumers make rational choices to achieve their goals. iii) Consumers can substitute between “like” goods. iv) Consumers make decisions based on less than perfect information. v) Law of Diminishing Marginal Utility: As consumption of a good increases, the additional utility derived eventually declines
