Consumer Behavior Theory: Utility, Equilibrium, and Demand
0:00 / 4:43
The Consumer’s Allocation Problem
0:00 - 0:35
Introduces limited income, competing wants, and the two analytical approaches used to explain demand and equilibrium.
The Model’s Starting Assumptions
0:35 - 1:08
Reviews rational choice, measurable utility, preferences, fixed income, and scarce priced goods.
Total Utility, Marginal Utility, and Diminishing MU
1:08 - 1:53
Defines total and marginal utility and illustrates why successive units generally provide less additional satisfaction.
Why Demand Slopes Downward
1:53 - 2:33
Connects diminishing marginal utility with lower prices and higher quantity demanded, alongside the TU–MU relationship.
The Equi-Marginal Rule
2:33 - 3:12
Explains consumer equilibrium through equal marginal utility per dollar across goods.
The $16 Ice-Cream and Cake Example
3:12 - 3:52
Follows the sequential allocation that reaches two ice creams, three cakes, equal MU per dollar, and 31 utils.
From Equilibrium to Demand—and Its Limits
3:52 - 4:43
Shows how changing prices generates demand points and discusses the model’s real-world qualifications.