JoVE Logo

Zaloguj się

5.4 : The Consumer Preferences I

Consumer Preferences

The cardinal approach of utility uses an imaginary measure of satisfaction, utils. In the ordinal approach, consumer preferences refer to the ranking a consumer makes between different product bundles or baskets. A market basket is a collection of products a consumer can purchase. Two goods are taken in a basket to explain consumer preferences. For example, a market basket could have coffee and sandwiches.

Assumptions about Consumer Preferences

The following assumptions are made:

  1. Completeness.
  2. Monotonic preferences or more is better.
  3. Transitivity.
  4. As consumers accumulate more of a specific good, their willingness to sacrifice another item to acquire even more of those particular goods decreases.

Completeness

It means that consumers can compare and rank all possible combinations of products, known as baskets. A consumer can definitively state their preference for any two baskets, say A and B. They might prefer basket A over B, B over A, or view them as equally desirable.

Monotonic Preferences or More is Better

It means that consumers prefer more of any good to less. For instance, if a consumer is comparing baskets of goods, under the monotonic preferences assumption, they would always prefer the basket with more quantity.

Tagi

Consumer PreferencesCardinal ApproachOrdinal ApproachMarket BasketUtilityCompletenessMonotonic PreferencesTransitivityProduct BundlesRanking Preferences

Z rozdziału 5:

article

Now Playing

5.4 : The Consumer Preferences I

Consumer Behavior

144 Wyświetleń

article

5.1 : Concept of Utility

Consumer Behavior

253 Wyświetleń

article

5.2 : Marginal Utility

Consumer Behavior

262 Wyświetleń

article

5.3 : Relationship between Total Utility and Marginal Utility

Consumer Behavior

505 Wyświetleń

article

5.5 : The Consumer Preferences II

Consumer Behavior

145 Wyświetleń

article

5.6 : Indifference Curves

Consumer Behavior

163 Wyświetleń

article

5.7 : Features of Indifference Curves I

Consumer Behavior

91 Wyświetleń

article

5.8 : Features of Indifference Curves II

Consumer Behavior

128 Wyświetleń

article

5.9 : Calculating Marginal Rate of Substitution

Consumer Behavior

360 Wyświetleń

article

5.10 : Marginal Rate of Substitution

Consumer Behavior

169 Wyświetleń

article

5.11 : Types of Indifference Curves

Consumer Behavior

214 Wyświetleń

article

5.12 : Budget Constraint I

Consumer Behavior

81 Wyświetleń

article

5.13 : Budget Constraint II

Consumer Behavior

58 Wyświetleń

article

5.14 : Factors Affecting Budget Constraint I

Consumer Behavior

76 Wyświetleń

article

5.15 : Factors Affecting Budget Constraint II

Consumer Behavior

58 Wyświetleń

See More

JoVE Logo

Prywatność

Warunki Korzystania

Zasady

Badania

Edukacja

O JoVE

Copyright © 2025 MyJoVE Corporation. Wszelkie prawa zastrzeżone