The theory of consumption
Abstract
In this chapter we will analyze how economic agents make decisions about consumption, or how they allocate their disposable income between various goods and services. If we apply the standard principle of rationality, consumers, seeing market prices and considering their incomes, seek to buy baskets of goods that match their personal tastes in order to maximize their satisfaction. That does not mean that the price of a good is the only aspect analyzed when making a choice; other factors also play an important role, such as quality and social and environmental value.
Keywords
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