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2 - Demand and Consumer Choice

from Part I - Introduction: Content, Structure, and Strategy of Mainstream Economics

Published online by Cambridge University Press:  25 May 2023

Daniel M. Hausman
Affiliation:
Rutgers University, New Jersey
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Summary

Although the normative model of rationality discussed in the first chapter is central to microeconomics, microeconomics is a positive theory describing, predicting, and explaining actual choices and their consequences. This chapter presents generalizations concerning market demand for commodities and services and consumer choice theory, which by means of economic models explains and to some extent corrects the generalizations concerning market demand. It presents an example of a simple economic model, where a consumer faces a choice between bundles consisting of only two infinitely divisible commodities, and it makes preliminary comments on the apparent empirical anomalies consumer choice theory faces. In reflecting on the theory of consumer choice and the explanation of demand, many questions arise concerning the structure of economic theory and whether the propositions of economic theory are in accord with the evidence. The material here should be familiar to economists.

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Publisher: Cambridge University Press
Print publication year: 2023

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  • Demand and Consumer Choice
  • Daniel M. Hausman, Rutgers University, New Jersey
  • Book: The Inexact and Separate Science of Economics
  • Online publication: 25 May 2023
  • Chapter DOI: https://doi.org/10.1017/9781009320283.004
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  • Demand and Consumer Choice
  • Daniel M. Hausman, Rutgers University, New Jersey
  • Book: The Inexact and Separate Science of Economics
  • Online publication: 25 May 2023
  • Chapter DOI: https://doi.org/10.1017/9781009320283.004
Available formats
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Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Demand and Consumer Choice
  • Daniel M. Hausman, Rutgers University, New Jersey
  • Book: The Inexact and Separate Science of Economics
  • Online publication: 25 May 2023
  • Chapter DOI: https://doi.org/10.1017/9781009320283.004
Available formats
×