Microeconomics second year

• Assumptions for consumers?

  Rational utility maximizers
• Rational 


  Making decisions that are logical and consistent with your goals.
• Consumers optimization 


  when a consumer chooses a combination of goods to maximize their utility while staying within their budget constraints
• what is consumer optimization constrained by?

  income, time, finite resources
• key elements in analysing consumer behaviour

  Budget constraints, preferences a,nd utility, optimization
• Consumption bundle 


  collection of one or more goods, represents quantities consumed of each good.
• another word for consumption bundle 


  market basket
• Budget Set

  Set of consumption bundles that are affordable with the prices given with income.